10. Capital and reserves

Depending on the entity’s legal form, contributions and accumulated profits are recorded under the following conditions :

1. Accounts for use by the sole proprietor.

• Account 101 « Sole proprietor’s capital » is credited with :

• • the value of the contributions of the sole proprietor at the beginning or during the activity ;

  • the profit of the previous financial year by debiting account 12 « Profit or loss for the financial year ».

• It is debited with :

• • deductions of all kinds ;

  • the previous financial year’s loss by crediting account 12.

• The personal contributions or withdrawals of the proprietor and, if applicable, his family are recorded during the financial year in an account 108 called « Owner’s proprietor account » . At the end of the financial year, the balance of this account is transferred to account 101 « Capital ».

2. Accounts for use by companies.

• Account 101 « Capital » records to its credit the amount of capital stated in the company deed. It follows the evolution of this amount during the company’s lifetime according to the decisions of the competent bodies.

• IIt is credited at the time of capital increases with :

• • the amount of the contributions in cash or in kind made by the partners, after deduction of the premiums linked to the share capital ;

  • du montant des incorporations de réserves.

• It is debited with the reductions of capital, whatever the cause, for example, absorption of losses or reimbursement to the partners.

• Account 1018 « Subscribed capital subject to specific regulations » records to its credit the amount of capital arising from specific transactions which are segregated according to legal and regulatory requirements. This account is subdivided as necessary.

• Account 104 « Premiums related to share capital »  records share premiums, merger premiums, contribution premiums, premiums on conversion of bonds into shares.

• The company issuing equity warrants, issued independently, definitively acquired by the issuing company and whose issue commits that company to carry out a capital increase, records the counterpart of the value of the warrants in account 104. The above characteristics of equity warrants are conditions that determine their recording in account 104 over the life of the warrants. If, after the issue date and before the expiry date, any of these conditions no longer apply, the counterpart value of the warrants recorded in account 104 is reclassified. The counterpart of the value of the warrants recorded in account 104 on the expiry date of these warrants is maintained in this account after expiry.

• Account 104 also records the amount of the entrance fee to cooperatives.

• Reserves to be recorded in account 106 « Reserves » are profits permanently allocated to the company until otherwise decided by the competent bodies. This account is credited, at the time of the appropriation of profits, with the amounts intended for :

• • the legal reserve ;

  • reserves not available for distribution, e.g.: reserves for own shares ;

  • statutory or contractual reserves ;

  • regulated reserves ;

  • other reserves.

• Account 106 is debited with the amounts withdrawn from the relevant reserves for incorporation into capital, distribution to partners and write-off of losses.

• Account 107 « Difference in equity method » records the excess of the total value of equity-valued securities over their purchase price.

• Account 109 « Shareholders : subscribed uncalled capital » is debited against the subdivision of the account 101 entitled « Subscribed capital – uncalled ».

3. Accounts for use by all entities.

• Account 105 « Revaluation differences » records differences arising from revaluation transactions which may be incorporated in whole or in part into capital. It is subdivided as necessary.