Jason, "trades in its own stock" It is usually illegal for a company to hold its own shares as assets of the company (except as Treasury stock which does not have the rights of a shareholder https://en.wikipedia.org/wiki/Treasury_stock). This is the case in Australian and UK law http://www.takeovers.gov.au/content/Resources/cslrc/cslrc_discussion_paper_no_5.aspx.
US law position is illustrated here https://scholar.smu.edu/cgi/viewcontent.cgi?article=3793&context=smulr. and is less clear cut. This is distinct from issuing stock or a stock split to lower the market value of the shares held by shareholders by issuing more shares in a proportional manner. AFAIK the stock split procedures described in GnuCash are implemented purely from the point of view of the owner of the shares who wishes to record that a company in which he owns shares has undertaken a stock split and he is recording the effect of the stock split on those shares that he he owns. I don't think this procedure however handles the accounting for a stock split from perspective ofthe company who issues the stock split to its shareholders. Derek will correct me if I am wrong on that. That was covered in outline in one of the articles I posted earlier. (In practice you may have to account for costs associated with the stock exchange requirements, issue of the securities etc. as well) GnuCash can certainly handle recording this from an accounting perspective, but its business features don't extend to any automation of or calculations for the process. All entries would be manual. If you are seriously operating a company that is publicly floated or going to be, you may need to look more closely at what your accounting needs will be and take professional advice as to appropriate software. This will particularly the case if you have significant payroll and/or inventory or cost management requirements. GnuCash has no capability in these areas at the moment and is unlikely to have in the near future. If you have a CFO in mind, it would be wise to consult him/her about such decisions as well. David Cousens ----- David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
