FAF3

Syllabus D10. Capital Structure 10 / 10

a) Understand the capital structure of a limited liability company including: 
i) Ordinary shares
ii) Preference shares (redeemable and irredeemable)
iii) Loan notes.

b) Record movements in the share capital and share premium accounts. 
c) Identify and record the other reserves which may appear in the company statement of financial position.
d) Define a bonus (capitalisation) issue and its advantages and disadvantages.
e) Define a rights issue and its advantages and disadvantages.
f) Record and show the effects of a bonus (capitalisation) issue in the statement of financial position.
g) Record and show the effects of a rights issue in the statement of financial position.
h) Record dividends in ledger accounts and the financial statements.
i) Calculate and record finance costs in ledger accounts and the financial statements.
j) Identify the components of the statement of changes in equity.
Capital Structure