Journal entries for ordinary shares

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sowrudy
Posts: 69
Joined: 22 Feb 2022, 03:26

Journal entries for ordinary shares

Post by sowrudy »

Hi Accounting Gurus

I have a question about journal entry for ordinary shares. Hope someone can help.

Just say a company called Tesla issues 100 ordinary shares with $1 per share in 2020.
And lets say, Mr. investor invested the money for those 100 shares, below journals are booked.

From Tesla........
Dr cash $100
Cr ordinary shares $100

From Mr investor....
Dr stock asset $100
Cr cash $100

In year 2021 (one year later), the share price is up in the stock market, and this time it's $1.5 per share . I know from buyers side, the Mr. investor will do mark to market entry, as below;

Dr stock $50
Cr revaluation reserve $50

I wonder if Tesla also does the revelation for its own stock based on the current market price? If so, how would the entry be?

Thanks in advance
Sowrudy
Leo
Posts: 908
Joined: 05 Apr 2020, 22:31

Re: Journal entries for ordinary shares

Post by Leo »

Tesla has nothing to do

Besides, if Mr investor hasn't opted for FVTOCI option, the gain of 50 should goes to P&L
Last edited by Leo on 10 May 2022, 13:24, edited 1 time in total.
JRSB
Trusted Expert
Posts: 1308
Joined: 01 Mar 2020, 01:10
Location: UK

Re: Journal entries for ordinary shares

Post by JRSB »

..and what are Investor's motivations for holding equity...
sowrudy
Posts: 69
Joined: 22 Feb 2022, 03:26

Re: Journal entries for ordinary shares

Post by sowrudy »

In this scenario, the investor is holding it for long term :)
sowrudy
Posts: 69
Joined: 22 Feb 2022, 03:26

Re: Journal entries for ordinary shares

Post by sowrudy »

Leo wrote: 10 May 2022, 12:43 Tesla has nothing to do

Besides, if Mr investor hasn't opted for FVTOCI option, the gain of 50 should goes to P&L
Thanks Leo, yes you are right, that should go to FVTPL under IFRS9 :)
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Marek Muc
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Joined: 15 Oct 2018, 17:21
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Re: Journal entries for ordinary shares

Post by Marek Muc »

as Leo wrote, the issuer does not remeasure financial instruments classified as equity

https://ifrscommunity.com/knowledge-bas ... -as-equity
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