The Accounting Review Vol. 23 No. 4 1948
ACCOUNTING ASPECTS OF PROTECTIVE PROVISIONS IN INDUSTRIAL PREFERRED STOCKS.
Abstract
Accountants come in contact with protective provisions in industrial preferred stocks on three occasions. First, the accountant has to record certain aspects of these protective provisions such as the recording of retirement fund transactions. Secondly, the accountant, as an auditor, may have to verify certain transactions as being in accord with protective provisions as stated in the charter. Thirdly, the accountant may be called upon as a consultant to give his opinion on such matters as the amount of adjustment required in conversion prices in cases where the corporation engages in acts which dilute the conversion right. The three protective provisions selected for analysis are retirement funds, restrictions on paying dividends to common stockholders, and conversion rights. Preferred stock retirement funds are of interest to accountants on two main scores, namely the recording aspects of retirement fund transactions require that the accountant be familiar with the charter provisions pertaining to the retirement fund, and auditing duties often require that accountants verify the sums set aside as being in agreement with the provisions in the charter for the establishment of the fund.
- DOI
- 10.2308/tar-7054935
- Volume
- 23
- Issue
- 4
- Pages
- 385-390
- Language
- en
- Sources
- openalex crossref