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5.5 Common stock
Publication date: 31 May 2024
us Financial statement presentation guide
Common stock represents the basic ownership interest in the reporting entity. It is the residual corporate interest that bears the ultimate risk of loss, as it is subordinate to all other stock. A reporting entity may have more than one class of common stock.
5.5.1 Balance sheet presentation
For SEC registrants, Regulation S-X 5-02 (29) provides guidance on presentation.
Excerpt from Regulation S-X 5-02 (29)
For each class of common shares state, on the face of the balance sheet, the number of shares issued or outstanding, as appropriate ..., and the dollar amount thereof. If convertible, this fact should be indicated on the face of the balance sheet.
The total number of outstanding shares disclosed on the face of the balance sheet is a legal determination. The legal shares outstanding may be different from the number of shares considered outstanding for accounting purposes and for earnings per share computations.
5.5.2 Disclosure
Regulation S-X 5-02 (29) also requires the following information to be disclosed in the footnotes, or on the face of the balance sheet, for each class of common stock:
- The title of the issuance
- The number of shares authorized
- If convertible, the basis of conversion
- Dollar amount of common shares subscribed but unissued, and the deduction of subscriptions receivable
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