What are the other capital reserves and how to account for them?

Other capital reserves refer to the capital reserves formed in addition to capital premium (or equity premium) items, which are mainly gains and losses directly included in the owner's equity. Its main accounting contents are as follows:

1) For long-term equity investments accounted for by the equity method, when there is a change in the capital reserve of the investee, the investment enterprise shall recognize the change in the capital reserve;

2) Equity-settled share-based payments, capital reserve recognized at the same time as management expenses recognized;

3) When the self-used real estate is converted into investment real estate, if the fair value model is used to account for the investment real estate, the fair value of the building is greater than the book value, and the capital reserve is recognized; (4) Capital reserve that can be recognized for the change in fair value of ** financial assets;

Other capital reserves include:

1. In addition to the capital reserve formed by capital premium (equity premium), non-cash asset provision for donations, equity investment provision, appropriation transfer, foreign currency capital conversion difference, related party transaction price difference, etc., the capital reserve formed due to other ** or reasons, which is mainly directly included in the gains and losses of the owner's equity.

2. It is formed by the valuation changes of specific assets, and when specific assets are disposed of, other capital reserves should also be disposed of.

3. Equity-settled share-based payments. If an enterprise provides services to employees or other parties under an equity-settled share-based payment agreement, it shall be included in other capital reserves at the fair value of the equity instruments on the date of grant; On the exercise date, the amount determined shall be calculated based on the number of equity instruments actually exercised, and shall be converted into paid-in capital and capital premium.

4. When the convertible bond is issued, the original treatment principle is as follows: it is credited to the "capital reserve-other capital reserve", and the actual conversion is transferred from the credit to the debit side of "capital reserve-other capital reserve"; After the revision of the Accounting Standards for Business Enterprises in 2014, the credit was included in "other equity instruments".

The new accounting standard only has "capital premium" and "capital reserve" under "capital reserve"."Other capital reserves", but there are still "equity investment provisions", but there are still "equity investment provisions", but in"other capital reserves" are downgraded.

Capital reserve specifically includes capital (or equity) premium, provision for non-cash assets receiving donations, provision for equity investment, transfer of appropriations, difference in related party transactions, difference in translation of foreign currency capital and other capital reserves.

The accounting of capital reserve includes the accounting of capital premium (or equity premium), the accounting of other capital reserves, and the accounting of capital reserve converted into capital increase.

Capital reserve - the scope of accounting for other capital reserves includes: changes in the fair value of financial assets available for **; equity-settled share-based payments; the difference between the fair value and the carrying amount of held-to-maturity investments converted into available** financial assets; the share of the investee's capital reserve for changes; The difference between the fair value and the carrying amount of the real estate or inventory converted into investment real estate. The value of the conversion right of the convertible bond is credited to the "capital reserve-other capital reserve" at the time of bond issuance, and is transferred from the credit side to the debit side of "capital reserve-other capital reserve" at the time of actual conversion.

Capital reserve accounts for the capital reserve obtained by the enterprise. The main contents are as follows:

1. Capital (or equity premium).

2. Prepare for accepting donations of non-cash assets;

3. Accept cash donations;

4. Preparation for equity investment;

5. Transfer of appropriations;

6. Difference in the translation of foreign currency capital;

7. Other capital reserves.

The accounting of capital reserve includes seven items: capital premium, provision for non-cash assets for donation, provision for equity investment, transfer of appropriations, difference in translation of foreign currency capital, difference in related party transactions and other capital reserves, of which other capital reserves include cash donations, debt restructuring, transfer of capital reserve reserves, and payables that cannot be paid.

Capital reserve refers to the provident fund formed by an enterprise in the course of operation due to the acceptance of donations, equity premiums, and the revaluation and appreciation of statutory property. Capital reserve is a credit that is not related to the earnings of a business but is related to capital. Capital reserve refers to the capital invested by investors or others in the enterprise, the ownership of which belongs to the investor, and the amount invested exceeds the authorized capital.

The new standard stipulates that the capital reserve formed by an enterprise is accounted for in the "capital reserve" account. The account is accounted for according to two detailed accounts, "capital premium" and "other capital reserve". The increase in the capital reserve of the enterprise registered by its lender.

The decrease in the registered capital reserve on the debit side, and the closing balance on the credit side, reflect the actual amount of capital reserve of the enterprise.

The calculation formula of capital reserve is: capital reserve = paid-in capital 10 retained earnings (to account for the proportion of registered capital - to account for the proportion of registered capital). Capital reserve generally belongs to the field of enterprise capital investment, at present, China's adoption of the registered capital system and other reasons have led to the generation of capital reserve, the company law stipulates that the use of capital reserve is mainly to increase capital, that is, to increase paid-in share capital.

1. The new standard stipulates that the capital reserve formed by the enterprise shall be""Capital reserve""Account accounting, the account is accounted for""Capital premium""with""Other capital reserves""The two detailed accounts are accounted for, and the credit side registers the increase in the capital reserve of the enterprise, the debit side registers the decrease in the capital reserve, and the closing balance is on the credit side, reflecting the actual amount of the capital reserve of the enterprise.

2. Capital reserve refers to the provident fund formed by the enterprise in the process of operation due to the acceptance of donations, equity premium and revaluation and appreciation of statutory property, capital reserve is a credit related to capital that has nothing to do with corporate income, and capital reserve refers to the capital invested by investors or others in the enterprise, the ownership belongs to the investor, and the amount invested exceeds the authorized capital.

Legal analysis: Capital reserve refers to the reserve fund directly formed by capital reasons, such as the premium amount of the issuance of **, the appreciation of the company's property, etc. The capital reserve can be converted into registered capital, but it cannot be used to cover losses.

Shares of the Company held by the Company shall not be subject to distribution of profits. 1. Capital reserve includes capital (or equity) premium, donated assets, transfer of appropriations, and differences in the translation of foreign currency capital. Capital reserve items mainly include:

1) Capital (or equity) premium refers to the part of the capital invested by the enterprise investor that exceeds its share in the registered capital;

2) The provision for accepting non-cash asset donations refers to the increase in capital reserve of enterprises due to the acceptance of non-cash asset donations;

3) Accepting cash donations refers to the increase in capital reserve of an enterprise due to accepting cash donations;

4) Equity investment provision refers to the capital reserve increased by the enterprise due to the investee's acceptance of donations and other reasons when the long-term equity investment of the investee is accounted for by the equity method, and the capital reserve increased by the enterprise calculated according to its shareholding ratio;

5) The transfer of appropriation refers to the part of the appropriation that the enterprise receives from the state for the purpose of technological transformation and technological research after the completion of the transfer to the capital reserve in accordance with the regulations. Enterprises should be recorded according to the amount transferred;

6) The difference in the translation of foreign currency capital refers to the difference in the translation of capital due to the difference in the exchange rate adopted by the enterprise in accepting foreign currency investment;

7) Other capital reserves refer to the capital reserves formed in addition to the above-mentioned capital reserves, as well as the amount transferred from the various reserve items of capital reserves. Debts forgiven by creditors are also accounted for under this project.

Legal basis: Article 166 of the Company Law of the People's Republic of China When a company distributes the after-tax profits of the current year, it shall withdraw 10% of the profits and include them in the company's statutory reserve fund. If the cumulative amount of the company's statutory reserve fund is more than 50% of the company's registered capital, it can no longer be withdrawn.

If the company's statutory reserve fund is insufficient to make up for the losses of previous years, it shall first use the profits of the current year to make up for the losses before withdrawing the statutory reserve funds in accordance with the provisions of the preceding paragraph. After the company withdraws the statutory reserve fund from the after-tax profits, it can also withdraw any reserve fund from the after-tax profits by resolution of the shareholders' meeting or the general meeting of shareholders. The after-tax profits remaining after the company makes up for the losses and withdraws the provident fund shall be distributed by the limited liability company in accordance with the provisions of Article 34 of this Law; Shares are distributed in proportion to the shares held by shareholders, except for those that are not distributed in proportion to the shares held by the articles of association.

If the shareholders' meeting, the general meeting of shareholders or the board of directors violates the provisions of the preceding paragraph by distributing profits to shareholders before the company makes up for losses and withdraws the statutory reserve fund, the shareholders must return the profits distributed in violation of the provisions to the company. Shares of the Company held by the Company shall not be subject to distribution of profits.