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

S-X 5-02 (29) requires SEC registrants to present the dollar amount and number of shares issued or outstanding, as appropriate, on the face of the balance sheet. If the common stock class is convertible, the reporting entity should label the common stock as such on the face of the balance sheet. When multiple classes of common stock exist, a reporting entity may aggregate them on the balance sheet and present the required information for each class of common stock in a footnote.
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

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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