Financial Accounting: An Integrated Statements Approach, 2nd Edition

Chapter 11 Stockholders’ Equity: Capital Stock and Dividends 509

ment and balance sheet formats are similar to those we have illustrated in this and pre-

ceding chapters.

In the 2004 edition of Accounting Trends & Techniques, over 97% of the surveyed

companies reported other comprehensive income. Over 80% of these companies dis-

closed other comprehensive income in the statement of stockholders’ equity, such as

illustrated for Mattel. Alternatively, companies may report comprehensive income on

the income statement or in a separate statement of comprehensive income.

Reporting Stockholders’ Equity

on the Balance Sheet

The Stockholders’ Equity section of the balance sheet is illustrated for Mattel, Inc., in

Exhibit 7. Notice that the balances shown in the last row of the statement of stock-

holders’ equity in Exhibit 6 are the balances that are disclosed on the balance sheet in

Exhibit 7. The balance sheet also commonly discloses the authorized, issued, and out-

standing shares, as well as the par value of various classes of stock. In addition, rele-

vant rights and privileges of the various classes of stock outstanding must be

disclosed.^12 Examples of types of information that must be disclosed include dividend

and liquidation preferences, rights to participate in earnings, conversion rights, and re-

demption rights. Such information may be disclosed on the face of the balance sheet

or in the accompanying notes.

Accumulated

Additional Other Total

Common Paid-In Treasury Retained Comprehensive Stockholders’

Stock Capital Stock Earnings Loss Equity

Balance, December 31, 2003 $441.00 $1,599.00 $(244) $ 707 $(287) $2,216

Comprehensive income:

Net income 573 573

Other comprehensive

income items 17 17

Comprehensive income 573 17 590

Purchase of treasury stock (255) (255)

Issuance of treasury stock (6) 26 20

Issuance of common stock for

exercise of stock options 0.20 1.80 2

Dividends declared on

common stock (187) (187)

Balance, December 31, 2004 $441.20 $1,594.80 $(473) $1,093 $(270) $2,386

Mattel, Inc.

Statement of Stockholders’ Equity

For the Year Ended December 31, 2004 (in millions)

Exhibit 6

Statement of Stockholders’ Equity

12 Statement of Financial Accounting Standards No. 129, “Disclosure Information about Capital Structure”

(Norwalk, CT: Financial Accounting Standards Board, 1997).

International Perspective
Balance sheets prepared
under International
Accounting Standards
report a line item for net
assets, which is the differ-
ence between a com-
pany’s assets and
liabilities.