Professional Development Programme on Enriching Knowledge of the, Accounting and Studies (BAFS) Curriculum Course 1 : Contemporary Perspectives on Accounting Unit 3 : Preparation 2 Technology Education Section, Curriculum Development Institute Education Bureau, HKSARG August 2008 1 Learning Objectives On completion of this unit, you should be able to: Understand the characteristics of limited companies. Understand different kinds of non-current liabilities for company finance, including debentures. Distinguish between ordinary shares and preference shares. Distinguish between reserves and provisions. Prepare properly presented income statement and balance sheet for a limited company. 2
Organisation of Unit 3 Preparation 2 in Hong Kong Limited by guarantee Limited by shares limited by shares and guarantee Unlimited but with share capital Characteristics of Limited legal personality on members liability Formality and compliance cost registration statements Accounting Issues Finance - Bank loan - Debenture Share Capital - Ordinary -Preference Reserves vs Provisions Exercise - 3 Characteristics of Limited Companies (1) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted Under Section 14 of the Companies Ordinance, a company may be formed with its members liability being limited or unlimited. 4
Characteristics of Limited Companies (2) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted Limited companies 1 2 are formed so that their members (or shareholders ) liability is limited to the amount paid up (or agreed to be paid up). 5 1 Limited company (or limited liability company ) means that the liability of its members is limited, but not the liability of the company is limited. 2 Since 13 February 2004, the required minimum number of members has been reduced from two to one. Characteristics of Limited Companies (3) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted Companies limited by guarantee do not issue shares and are formed so that their members liability is limited by a specific amount. Each member undertakes or guarantees to pay in the event of the company experiencing financial difficulties when being wound up. 6
Characteristics of Limited Companies (4) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted Companies limited by shares issue shares and are formed so that their members liability is limited to the amount of shares paid up. 7 Characteristics of Limited Companies (5) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted Under Section 29 of the Companies Ordinance, a private company is a company formed under the Companies Ordinance whose Article of Association: - restricts the right of members to transfer shares; - limits the number of the members to 50; and - prohibits the company from inviting the public to subscribe its shares. 8
Characteristics of Limited Companies (6) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted A public company, which may be listed or unlisted, is a company formed under the Companies Ordinance but not falling into the definition of private company under Section 29 of the Companies Ordinance. 9 Characteristics of Limited Companies (7) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted Companies limited by shares and guarantee combine the characteristics of companies limited by guarantee and companies limited by shares. Since 13 February 2004, companies limited by shares and guarantee are no longer allowed to be formed. 10
Characteristics of Limited Companies (8) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted Unlimited companies may be formed under the Ordinance with share capital. However, this type of company is rarely found in Hong Kong because of the unlimited liability imposed on members. 11 Characteristics of Limited Companies (9) Generally, a company is formed with the above characteristics. 12
Characteristics of Limited Companies (10) 13 A company is a legal person separated from the individuals who ultimately own the company (ie shareholders, members or owners). The company is not a natural person and, therefore, can only act through natural persons, like directors. Characteristics of Limited Companies (11) Like a person, a company owns independent capacity 1 to: - enter into business relationships and other legally binding obligations; - sue; and - be sued, until its existence is terminated through a winding up. 14
Characteristics of Limited Companies (12) 1 The capacity and obligation of a company is entirely independent from the members of the company, under Section 16 of the Companies Ordinance, unless, in exceptional circumstance, the corporate veil is pierced for following grounds: - the company is a mere façade concealing the truth (Trustor AB v Smallbone); - the company is owned by nationals of an enemy country (Daimler Co Ltd v Continental Tyre & Rubber Co (GB) Ltd); 15 Characteristics of Limited Companies (13) 1 The capacity and obligation of a company is entirely independent from the members of the company, under Section 16 of the Companies Ordinance, unless, in exceptional circumstance, the corporate veil is pierced for following grounds: - the company is used deliberately to evade legal obligations (Gilford Motor Co Ltd v Horne); and - the company is used to conceal criminal activities or their proceeds (HKSAR v Leung Yat Ming). 16
Characteristics of Limited Companies (14) of members liability (except unlimited companies) of members of a company, other than an unlimited company, is limited to the amount which has been agreed as the paid up value of the shares. 17 Characteristics of Limited Companies (15) statements of limited companies must be audited annually and publicised 1. In addition, particulars of the company and company officers, like details of directors, secretary and assets secured to others, must be kept updated with the Companies Registrar. 18 1 Private limited companies are exempted by the Companies Ordinance from publicising the audited financial statements.
Characteristics of Limited Companies (16) Formality and The incorporation and maintenance of a company need to comply with the most regulations and bear the highest compliance cost, compared with sole proprietors and partnerships. 19 Characteristics of Limited Companies (17) Formality and Limited companies are required to be incorporated with complying particular requirements, like: - the company name must include Limited, in English, and 有 限 公 司 in Chinese, unless dispensed by the Companies Registrar in rare situation; 20
Characteristics of Limited Companies (18) Formality and - preparation and registration 1 of company s constitution, which comprises Memorandum of Association and Articles of Association; and - paying initial registration fees. 1 The registration is optional to companies limited by shares. 21 Characteristics of Limited Companies (19) Formality and Limited companies are required to comply with a range of statutory requirements after incorporation, like: - appointing directors and secretaries; - holding directors meeting; 22
Characteristics of Limited Companies (20) Formality and - holding annual members meeting; - preparing financial statements which comply with the requirements of the Companies Ordinance and HKFRS; - appointing auditors to audit their annual financial statements; 23 Characteristics of Limited Companies (21) Formality and - preparing and filing details of the companies and the companies officers to the Companies Registrar; and - paying annual registration fees. 24
Characteristics of Limited Companies (22) The feature of separate legal personality of companies allows a company to continue its business when a member departs or dies. 25 Characteristics of Limited Companies (23) Like proprietors and partnerships, companies are required to register 1 particulars with the Inland Revenue Department (IRD) in addition to the registration with the Companies Registrar, whether the company commences its business or not. 1 The registration with the IRD is to be filed within one month of registration with the Companies Registrar. 26
Characteristics of Limited Companies (24) There are some items specifically found in the financial statements of a company, but not in the financial statements of a proprietorship or a partnership, like: Debenture, Ordinary Shares 1, Preference Shares 1 and Share Premium 1. We will go through these items one by one. 27 1 Except for companies limited by guarantee. Characteristics of Limited Companies (25) Sole Proprietor Partnership Limited No No Yes No No (except limited partnership) Yes (except unlimited company) High High Low Low Low High Short Medium Long Require Require Require (plus registration at Companies Registrar) Require Require Require 28 In summary, a comparison of the characteristics among sole proprietor, partnership and limited company are presented as above.
Finance (1) ABC Limited Balance Sheet (Extract) as at 31 December 2007 $ : Non-current liabilities Bank loan 500,000 Debenture 200,000 750,000 : : In the non-current liabilities section of a company s balance sheet, we usually find bank loan and debenture. These items represent the non-current portion of borrowings from banks and other lenders. 29 Whatever they are called, their accounting treatments are more or less the same. Finance (2) GENERAL JOURNAL Date Account Titles and Narrative Dr $ Cr $ In journalising transactions, we need to fill in the General Journal. Example: On 1 Jan 2007, the company borrows $500,000 from bank (repayable after one year) and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 30
Finance (3) GENERAL JOURNAL Date Account Titles and Narrative Dr $ Cr $ 2007 Jan 1 First, fill in the date of transaction. Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 31 Finance (4) GENERAL JOURNAL Date Account Titles and Narrative Dr $ Cr $ 2007 Jan 1 Cash Bank loan Fill in the items involved. Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 32
Finance (5) GENERAL JOURNAL Date Account Titles and Narrative Dr $ Cr $ 2007 Jan 1 Cash Bank loan To record the loan borrowed from the bank. Fill in details of the transaction. Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 33 Finance (6) GENERAL JOURNAL 34 Date Account Titles and Narrative Dr $ Cr $ 2007 Jan 1 Cash 500,000 Bank loan 500,000 To record the loan borrowed from the bank. + - We use: Asset Cash Dr Cr - Debit (Dr) to represent the increase of the Bank loan Cr Dr balance of cash; and Equity Cr Dr - Credit (Cr) to represent Revenue Cr Dr the increase of the Expense Dr Cr balance of bank loan. Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to:
Finance (7) GENERAL JOURNAL Date Account Titles and Narrative Dr $ Cr $ 2007 Jan 1 Cash 500,000 Bank loan 500,000 To record the loan borrowed from the bank. Jan 1 Cash 200,000 Debenture 200,000 To record the debenture issued at par. Similarly, we journalise the transaction concerning debenture issuance. Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 35 Finance (8) ASSET LIABILITY Debit Credit Debit Credit (+) (-) (-) (+) REVENUE Debit Credit (-) (+) OWNERS' EQUITY Debit Credit (-) (+) EXPENSE Debit Credit (+) (-) Choose appropriate types of ledger accounts Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 2. post the journal entries to ledger accounts; 36
Finance (9) Cash Debit (+) 1 Jan 07 Bank loan $500,000 Credit (-) Bank Loan Debit (-) Credit (+) 1 Jan 07 Cash $500,000 Post the journal entries to related ledger account one by one. Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 2. post the journal entries to ledger accounts; 37 Finance (10) Cash Debit (+) 1 Jan 07 Bank loan $500,000 1 Jan 07 Debenture $200,000 Credit (-) Bank Loan Debit (-) Credit (+) 1 Jan 07 Cash $500,000 Debenture Debit (-) Credit (+) 1 Jan 07 Cash $200,000 Post the journal entries to related ledger account one by one. Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 2. post the journal entries to ledger accounts; 38
Finance (11) Cash Debit (+) 1 Jan 07 Bank loan $500,000 1 Jan 07 Debenture $200,000 $700,000 Credit (-) Bank Loan Debit (-) Credit (+) 1 Jan 07 Cash $500,000 $500,000 Compute the balance of the ledger accounts Debenture Debit (-) Credit (+) 1 Jan 07 Cash $200,000 $200,000 39 Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 2. post the journal entries to ledger accounts; Finance (12) Trial Balance (Extract) as at 31 December 2007 Dr $ Cr $ : : : : : : : : : Bank loan 500,000 Debenture 200,000 : Total 1,000,000 1,000,000 1. Copy the balance of each ledger account to Trial Balance. 2. Compute the total debit balance and total credit balance. 40 Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year) from bank and issues debenture of $200,000 (repayable after one year) at par, the bookkeeper is required to: 2. post the journal entries to ledger accounts; 3. prepare trial balance;
Finance (13) ABC Limited Balance Sheet (Extract) as at 31 December 2007 $ : Non-current liabilities 1 Bank loan 500,000 Debenture 200,000 750,000 : Example: On 1 Jan 2007, the company borrows $500,000 (repayable after one year 1 ) from bank and issues debenture of $200,000 (repayable after one year 1 ) at par 2, the bookkeeper is required to: 2. post the journal entries to ledger accounts; 3. prepare trial balance; 4. journalise balancing day adjustments (final adjustments), post them to ledger accounts and prepare adjusted trial balance (ignored); and 5. prepare financial statements (income statement and balance sheet). 41 1 A liability is classified as non-current if it is repayable after one year.. 2 Debentures may be issued at par, at discount or at premium. The discount and premium would be amortised to profit or loss under effective interest method. You may refer to HKAS 39 Instruments: Recognition and Measurement for more details. Ordinary Shares vs Preference Shares (1) Ordinary Shareholders Preference Shareholders Companies are usually incorporated with one class of shares, described as ordinary shares. Preference shares is an additional class of shares which confer on the holders preferred rights over ordinary shares. 42
Ordinary Shares vs Preference Shares (2) Ordinary Shareholders Preference Shareholders The issuance and the terms of preference shares must be authorised by the company s Article of Association. In usual circumstance, preference shares include the following features: - a preferred right of dividends (at a fixed rate and distributable in priority of dividends of ordinary shares); - a preferred right to be paid up in priority to ordinary shareholders on a winding up; - a cumulative right to dividends, unless specified not; - no voting rights in members general meetings, unless dividends are in arrears; 43 Ordinary Shares vs Preference Shares (3) Ordinary Shareholders Preference Shareholders - no rights to participate in surplus profits on a winding up; and - redeemable, if specified, at the option of the company. 44
Ordinary Shares vs Preference Shares (3) Activity On 1 Jan 2007, ABC Limited is incorporated and it issues: - 10,000 ordinary shares of $10 each at $150,000; and - 5,000 preference shares of $10 each at $70,000. Can you work out the journal entries for the shares issuances? 45 Ordinary Shares vs Preference Shares (4) GENERAL JOURNAL Date Account Titles and Narrative Dr $ Cr $ 2007 Jan 1 Cash 150,000 Ordinary share capital 10,000 Share premium 1 50,000 To record the ordinary shares issued. Jan 1 Cash 70,000 Preference share capital 50,000 Share premium 1 20,000 To record the preference shares issued. Similarly, we journalise the transaction concerning shares issuance. 1 Under the Companies Ordinance, shares may be issued at par or at premium, but not at discount. The excess of par value is credited to Share Premium account. 46
Ordinary Shares vs Preference Shares (5) ASSET LIABILITY Debit Credit Debit Credit (+) (-) (-) (+) REVENUE Debit Credit (-) (+) OWNERS' EQUITY Debit Credit (-) (+) EXPENSE Debit Credit (+) (-) Choose appropriate types of ledger accounts Activity On 1 Jan 2007, ABC company Limited is incorporated and it issues: - 10,000 ordinary shares of $10 each at $150,000; and - 5,000 preference shares of $10 each at $70,000. 2. post the journal entries to ledger accounts; 47 Ordinary Shares vs Preference Shares (6) Cash Debit (+) 1 Jan 07 Ordinary Shares $100,000 1 Jan 07 Share Premium $50,000 Credit (-) Ordinary Shares Debit (-) Credit (+) 1 Jan 07 Cash $100,000 Share Premium Debit (-) Credit (+) 1 Jan 07 Cash $50,000 Post the journal entries to related ledger accounts one by one. Activity On 1 Jan 2007, ABC Limited is incorporated and it issues: - 10,000 ordinary shares of $10 each at $150,000; and - 5,000 preference shares of $10 each at $70,000. 2. post the journal entries to ledger accounts; 48
Ordinary Shares vs Preference Shares (7) Cash Debit (+) Credit (-) 1 Jan 07 Ordinary Shares $100,000 1 Jan 07 Share Premium $50,000 1 Jan 07 Preference Shares $50,000 1 Jan 07 Share Premium $20,000 Preference Shares Debit (-) Credit (+) 1 Jan 07 Cash $50,000 Share Premium Debit (-) Credit (+) 1 Jan 07 Cash $50,000 1 Jan 07 Cash $20,000 Post the journal entries to related ledger accounts one by one. Activity On 1 Jan 2007, ABC Limited is incorporated and it issues: - 10,000 ordinary shares of $10 each at $150,000; and - 5,000 preference shares of $10 each at $70,000. 2. post the journal entries to ledger accounts; 49 Ordinary Shares vs Preference Shares (8) Cash Debit (+) 1 Jan 07 Ordinary Shares $100,000 1 Jan 07 Share Premium $50,000 1 Jan 07 Preference Shares $50,000 1 Jan 07 Share Premium $20,000 $220,000 Credit (-) Ordinary Shares Debit (-) Credit (+) 1 Jan 07 Cash $100,000 $100,000 50 Preference Shares Debit (-) Credit (+) 1 Jan 07 Cash $50,000 $50,000 Share Premium Debit (-) Credit (+) 1 Jan 07 Cash $50,000 1 Jan 07 Cash $20,000 $70,000 Post the journal entries to related ledger accounts one by one. Activity On 1 Jan 2007, ABC Limited is incorporated and it issues: - 10,000 ordinary shares of $10 each at $150,000; and - 5,000 preference shares of $10 each at $70,000. 2. post the journal entries to ledger accounts;
Ordinary Shares vs Preference Shares (9) Trial Balance (Extract) as at 31 December 2007 Dr $ Cr $ : : : : : : : : : Ordinary shares 100,000 Preference shares 50,000 Share premium 70,000 Total 1,000,000 1,000,000 1. Copy the balance of each ledger account to Trial Balance. 2. Compute the total debit balance and total credit balance. 51 Activity On 1 Jan 2007, ABC Limited is incorporated and it issues: - 10,000 ordinary shares of $10 each at $150,000; and - 5,000 preference shares of $10 each at $70,000. 2. post the journal entries to ledger accounts; 3. prepare trial balance; Ordinary Shares vs Preference Shares (10) ABC Limited Balance Sheet (Extract) as at 31 December 2007 $ : Equity Ordinary shares 100,000 Preference shares 50,000 Share premium 70,000 220,000 52 Activity On 1 Jan 2007, ABC company Limited is incorporated and it issues: - 10,000 ordinary shares of $10 each at $150,000; and - 5,000 preference shares of $10 each at $70,000. 2. post the journal entries to ledger accounts; 3. prepare trial balance; 4. journalise balancing day adjustments (final adjustments), post them to ledger accounts and prepare adjusted trial balance (ignored); and 5. prepare financial statements (income statement and balance sheet).
Reserves vs Provisions (1) What is the difference between reserves and provisions? In preparing the financial statements for a company, you may observe that the uses of provisions and reserves are confusing. You may see reserves as an alternative term for provisions and use reserves to describe certain components of shareholders equity, for example: revaluation reserve. Do you know the difference between reserves and provisions? 53 Reserves vs Provisions (2) As defined in HKAS 37 Provisions, Contingent Liabilities and Contingent Assets, provisions is a liability 1 of uncertain timing or amount. In accounting, reserves is commonly used to describe any part of shareholders' equity, except for share capital. For example, share premium is a reserve created from shareholders' contributions, i.e. amount paid by shareholders for shares in excess of their par value. Traditionally, reserves is sometimes used instead of term provisions, however such a use is now not consistent with the definition of provisions by HKAS 37. 1 A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits. (Framework for the Preparation and Presentation of ) 54
Exercise (1) Your Show Time Now, it is time to do exercises. Based on what you have learned in Unit 2 and Unit 3, prepare the financial statements for the following company. 55 56 Exercise (2) TT Limited Unadjusted Trial Balance as at 31 December 2007 Dr $ Cr $ Accounts payable 5,000 Accounts receivable 8,000 Bank 3,000 Bank loan, repayable within one year 2,000 Bank loan, repayable after five years 8,000 of sales 20,000 Delivery expenses 700 Electricity expenses 1,300 Motor vans, at cost 40,000 Motor vans Accumulated depreciation, at 1 Janauary 2007 6,000 Rent and rate expenses 7,000 Other operating expenses 11,000 Sales 50,000 Ordinary share capital 10,000 Share premium 2,000 Retained profit, at 1 January 2007 8,000 91,000 91,000 TT Limited carries a retailing business. The unadjusted trial balance in the business books as at 31 December 2007 is as above. Other information: - estimated income tax expense for the current year amounted to $2,000; and - depreciation expense for the current year amounted to $2,000.
Exercise (3) TT Limited Unadjusted Trial Balance as at 31 December 2007 Dr $ Cr $ Accounts payable 5,000 Accounts receivable 8,000 Bank 3,000 Bank loan, repayable within one year 2,000 Bank loan, repayable after five years 8,000 of sales 20,000 Delivery expenses 700 Electricity expenses 1,300 Motor vans, at cost 40,000 Motor vans Accumulated depreciation, at 1 Janauary 2007 6,000 Rent and rate expenses 7,000 Other operating expenses 11,000 Sales 50,000 Ordinary share capital 2,000 Share premium 10,000 Retained profit, at 1 January 2007 8,000 91,000 91,000 Please prepare the financial statements for TT Limited. 57 Exercise (4) TT Limited Income Statement for the year ended 31 December 2007 $ $ Sales 50,000 of sales (20,000) Gross profit 30,000 Expenses: Delivery expenses (700) Depreciation expenses (2,000) Electricity expenses (1,300) Rent and rate expenses (7,000) Other operating expenses (11,000) (22,000) Profit before tax 8,000 Income tax expense (2,000) Profit for the year 6,000 58 Please compare your answer with above suggested answer for the detailed income statement.
Exercise (5) TT Limited Income Statement for the year ended 31 December 2007 $ Sales 50,000 of sales (20,000) Gross profit 30,000 Distribution costs (700) Adminstrative expenses (2,000 + 1,300+ 7,000 + (21,300) 11,000) Profit before tax 8,000 Income tax expense (2,000) Profit for the year 6,000 Please compare your answer with above suggested answer for the income statement (with expenses classified by function) in accordance with HKAS 1 Presentation of. 59 Exercise (6) ASSETS $ $ Non-current assets Motor vans, at cost 40,000 Motor vans Accumulated depreciation (6,000 + 2,000) (8,000) 32,000 Current assets Accounts receivable 8,000 Bank 3,000 11,000 Total assets 43,000 EQUITY AND LIABILITIES Ordinary share capital 10,000 Share premium 2,000 Retained profit, at 1 January 2007 8,000 Profit for the year 6,000 Retained profit, at 31 December 2007 14,000 Total equity 26,000 Non-current liabilities Bank loan (repayable after 5 years) 8,000 60 Current liabilities Bank loan (repayable within 1 year) 2,000 Current tax payable 2,000 Accounts payable 5,000 9,000 Total liabilities 17,000 Total equity and liabilities 43,000 Please compare your answer with above suggested answer for the balance sheet.
Recapitulation Now, you have come to the end of the unit. Let us recapitulate the essential points of the following in the next four slides: Characteristics of limited companies Distinction between reserves and provisions 61 Recapitulation - Characteristics of Limited Companies (1) Limited by Guarantee and Guarantee Unlimited but with Share Capital Private Public Listed Unlisted Under the Companies Ordinance, a company may be formed with above characteristics. Broadly speaking, a company may be formed with its members liability being limited or unlimited. For a limited company, the liability of the members is limited to the amount paid up (or agreed to be paid up). 62
Recapitulation - Characteristics of Limited Companies (2) Generally, a company is formed with the above characteristics. 63 Recapitulation - Characteristics of Limited Companies (3) In the financial statements of a limited company listed on the Hong Kong Stock Exchange, the following items are found: - debenture; - ordinary shares; - preference shares; and - share premium. 64
Recapitulation Reserves vs Provisions HKAS 37 Provisions, Contingent Liabilities and Contingent Assets defines a provision as a liability of uncertain timing or amount. What is the difference between reserve and provision? In accounting, reserves is commonly used to describe any part of shareholders' equity, except for share capital. 65 Further Readings Yau, L. and Yau, R. (2001), Book-Keeping and Accounts, Hong Kong Institute of Accredited Accounting Technicians Limited, 2nd Edition. Li, T. M. and Ng, P. H. (2005), Accounting, Hong Kong Institute of Accredited Accounting Technicians Limited. Li, T. M. and Ng, P. H. (2007), HKAL Principles of Accounts (Volume 1), Pilot Publishing Ltd, 2nd Edition. 邱 韞 華 及 邱 在 光 (2001), 簿 記 與 會 計, 香 港 財 務 會 計 協 會 有 限 公 司, 第 二 版. 66
End of the Unit End-of of-unit Assessment This is the end of Unit 3. Please go to the Unit Assessment before attempting the next unit. 67