October 19, 2006

Company Capital Reserves – what are they?

Filed under: Running a Limited Company — NeilW @ 1:53 pm

A company has a different capital structure to that of a sole trader or partnership. On a formal balance sheet it is marked as ‘Capital and Reserves’. Essentially the accounts in there are just like any other and you can move money in and out of them. However accounting and company law requires that certain capital accounts exist and that certain amounts of money are ‘reserved’. These are known as the non-distributable reserves – in that any money in them cannot be used to pay dividends to shareholders. The common ones for a company limited by shares are:

Called up share capital

This is the face value of the shares in issue to all shareholders. If you have 100 shares in issue and they have a face value of £1, then the value of this reserve will be £100. It only goes up and down with the number of shares in issue. If the company buys some back it goes down. If it issues some more it goes up.

In public companies the value of this reserve can be substantial, and often a company will look to replace its (say) £1 shares with 1p shares simply so that more funds are available to distribute.

Share premium account

This is the amount of money subscribed for shares in excess of the face value. More often seen on larger companies that issue shares to third parties. If you have 100 £1 shares, and your shareholders paid £3 each for them then £100 goes in the ‘Called up share capital’ reserve, and the other £200 goes in here.

Revaluation reserve

This reserve holds the unrealised change in the value of investment holdings. Normally all assets are depreciated away – however assets held as investments are required to be revalued regularly by the accounting standards. Any increase in value over cost goes in here. When an investment is sold, the relevant proportion of this reserved is moved to one of the distributable reserves. It never goes onto the Profit and Loss account.

Distributable Reserves

A distributable reserve is anything that isn’t non-distributable. The main one is of course the ‘Profit and loss account’ which in the Capital reserves holds this year’s Profit and loss, plus any carried forward from previous years.

This can be, and often is, the only distributable reserve, but you can set up others. If you want you can create new reserves and move profit to them – for example an ‘Equipment reserve’ used to replenish equipment. Depending upon how you use your accounts you can treat the reserves in a similar way as you would a savings account.

Hopefully this short primer is useful. Questions below.

October 18, 2006

Rails Subversion TNG

Filed under: Ruby on Rails,Version Control With Subversion — NeilW @ 3:15 pm

What’s wrong

I’ve never been happy with the instructions for placing a Rails application under version control with Subversion. They have always felt like a retrofit and a little unnatural.

You can get around a lot with scripting, but I just wanted it set up properly in the first place so I don’t have to worry about it.

So here IMHO is a better way of doing Subversion version control with Rails apps.

My Reputation Precedes Me

Filed under: mumblings — NeilW @ 11:05 am

I’ve just had one of those randomly generated user ids through for one of the financial institutions I deal with.

It ends TWATT

They must have had a conversion with the Ministry of Reputations – HMRC division 🙂

October 11, 2006

First Post

Filed under: mumblings — NeilW @ 7:09 am

I’m not a great writer, but I suppose if anybody else is going to find out what is bubbling between my lugholes then I’m going to have to write it down at some point.

Either that or video myself and that would be far worse I feel…

… particularly if I did it in the buff.

« Previous Page

Blog at WordPress.com.