FINANCIAL ACCOUNTING AND REPORTING
- Its name is derived from the preference
Corporation
-is an artificial being created by operation of law, having
the right of succession and the powers, attributes, and
properties expressly authorized by law or incidental to
its existence (RA 11232 REVISED CORPORATION
CODE OF THE PHILIPPINES)
Corporation under RA 11232
● Stock Corporation
- Are those which have capital stock
divided into shares and are authorized to
distribute to the holders of such shares,
dividends, or allotments of the surplus
profits on the basis of the shares held
● Non-stock Corporation
- One where no part of its income is
distributed as dividends to its members,
trustees, of officers, subject to the
provisions of this Code on dissolution
- May be formed or organized for
charitable, religious, educational,
professional, cultural, fraternal, literary,
scientific, social, civic service, or similar
purposes, like trade, industry, agricultural
and like chambers, or any combination
thereof
DIFFERENT KIND OF STOCKS
● Common stocks
- Are usually purchased for participation in
the profits and control of ownership and
the management of the company they -
they have voting rights
- Are entitled to an equal pro rata division
of profits without preference or
advantage over another stockholder
- They have the last claim on dividends
and are the last to collect in case of
liquidation
● Preferred stock
given to the holders of this stock over
holders of common stocks
- G-holders of preferred tax are entitled to
receive a fixed minimum amount of
dividends (expressed either in pesos or
as percentage of the stock’s par value?
To the extent declared by the company’s
Board and if there are sufficient retained
earning, before any dividends are paid to
the holders of common stocks
● Cumulative preferred stock
- A type of preferred stock with a provision
that stipulates that if any dividend
payments have been missed i the past,
the dividends owed must be paid out to
cumulative preferred shareholders first
- This class of shareholders is to be paid
ahead of other classes of preferred stock
shareholders and ahead of common
stock
● Convertible preferred stock
- Are preferred shares that include an
option for the holder to convert them into
a fixed number of common shares after a
predetermined date
- Type of hybrid security with features of
both debt and equity
OTHER TYPES OF SHARES FOR CONSTITUTIONAL
OR LEGAL REQUIREMENTS
● Founder’s share
- The equity that is given to the early
founders of an organization
- This type of stock differs in a few
important ways from common stock sold
in the secondary market
- Key differences are (1) that founders
stock can only be issued at face value,
and (2) it comes with a vesting schedule
 - May be given certain rights and privilege
not enjoyed by the owners of other
stocks. Where the exclusive right to vote
and be voted for in the election of
directors is granted, it must be for a
limited period not to exceed five (5) years
from the date of incorporation (RA
11232)
STOCK CLASSIFICATION
● Redeemable share
- Are shares that a company has agreed it
will, or may, redeem (in other words buy
back) at some future date
- The shareholders wills till have the right
to sell or transfer the shares subject to
the articles of association or any
shareholder’s agreement
The redemption terms will have been set out in the
share issue documents, the prescribed particulars for
the shares and, potentially, included in the company’s
articles of association. The redemption terms will
included the redemption date, or dates and the basis for
the redemption price
Rationale behind the Treasury Stock
- Treasury stock is often kept for the purpose of
reselling, for controlling interest in the company,
to prevent undervaluation of shares, and for
improved financial ratios such as the earnings
per share ratio, the price earnings ratio
● Authorized shares
- Shares of stock that can be issued by
companies to investors
● Issued shares
- shares owned by the corporation or the
general public
● Outstandings shares
- Represent the number of a company’s
shares that are traded on the secondary
market and, therefore,a re available to
investors

The redemption date may be:

● Fixed date (eg redeemed on a set date or a set
number of years after issue)
● At the director’s discretion
● At the company’s option
● At the shareholder’s option

● Treasury share
- Are shares of stock which have been
issued and fully paid for, but
subsequently reacquired by the issuing
corporation through purchase,
redemption, donation, or some other
lawful means. Such shares may again be
disposed of for a reasonable price fixed
by the board of directors