COMM-1106EL Chapter Notes - Chapter 11: Dividend Payout Ratio, Dividend Yield, Stock Split
6 Dec 2016
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Why shareholders" equity is of significance to users: share purchases are commonly made by individuals as part of their investment portfolios, either: Directly (by purchasing shares from the company or from other investors); or. What is included in the shareholders" equity section of financial statement. Share capital represents the amount that investors paid for the shares when they were initially issued by the company. Retained earnings represents the assets generated from the accumulated earnings of the company that have not been distributed as dividends to shareholders. 2 other accounts that may be reported in shareholder"s equity are: Comprehensive income is reported after net income as other comprehensive income, and is excluded from the net income value. Just as this income is excluded from net income, they are also excluded from retained earnings. Instead, other comprehensive income is usually aggregated in an account known as accumulated other comprehensive income (aoci), which is part of shareholders" equity.
