NAC706.807. Incorporated companies: Net worth.

Incorporated companies must keep the following accounts as a record of their net worth:

     1. An account for common stock.

     2. Accounts for preferred stock must include the par value or the stated value of stock without par value, if such stock has a stated value and if not, the cash value of the consideration received for such nonpar stock, of each class of capital stock actually issued, including the par or stated value of such capital stock in the account for reacquired, treasury, capital stock described in subsection 6. When the actual cash value of the consideration received is more or less than the par or stated value of any stock having a par or stated value, the difference must be credited or debited, as the case may be, to the premium or discount account for the particular class and series of stock. When capital stock is retired, these accounts must be charged with the amount at which such stock is carried. A separate ledger account, with a descriptive title must be maintained for each class and series of stock. The supporting records must show the shares nominally issued, actually issued, and nominally outstanding.

     3. The account for other paid-in capital includes the balance of all other credits for paid-in capital not included in the capital stock accounts and must be kept so as to show the source of the credits included for each class and series of stock issued. The items in the account must indicate:

     (a) Premium received on original issues of capital stock.

     (b) Donations received from stockholders consisting of capital stocks or reduction of debt of the company and the cash value of other assets received as a donation.

     (c) Reduction in par or stated value of capital stock.

     (d) Gain on resale or cancellation of reacquired capital stock.

     (e) Miscellaneous paid-in capital.

Ê Premium on capital stock must not be set off against expenses. A premium received on an issue of a certain class or series of stock must not be set off against expense of another issue of the same class or series.

     4. The account for installments received on capital stock must include in a separate subdivision for each class and series of capital stock the amount of installments received on capital stock on a partial or installment payment plan for subscribers who are not bound by legally enforceable subscription contracts. As subscriptions are paid in full and certificates issued, this account must be charged and the appropriate capital stock account credited with the par or stated value of such stock. Any discount or premium on an original issue must be included in the appropriate discount or premium account.

     5. The account for discount on capital stock must include in a separate subdivision for each class and series of capital stock all discount on the original issuance and sale of capital stock, including additional capital stock of a particular class or series as well as first issues. When capital stock which has been actually issued is retired, the amount in this account applicable to the shares retired must be written off to the account, for other paid-in capital described in subsection 3, but the amount must be charged to the account for sundry adjustments to surplus described in subsection 8 to the extent that it exceeds the balance in the account for other paid-in capital.

     6. The account for reacquired, treasury, capital stock must include in a separate subdivision for each class and series of capital stock the cost of capital stock actually issued by the company and reacquired by it, and not retired or cancelled, except for stock which is held by trustees in sinking or other funds. When reacquired capital stock is retired or cancelled, the difference between its cost, including commission and expenses paid in connection with the reacquisition, and its par or stated value plus any premium and less any discount applicable to the shares retired, must be debited or credited, as appropriate to the account for other paid-in capital described in subsection 3, but debits must be charged to the account for sundry adjustments to surplus described in subsection 8 to the extent that it exceeds the balance of gains on resale or cancellation of reacquired stock included in the account for other paid-in capital.

     7. The account for retained earnings includes the balance of retained earnings at the beginning of the calendar year. It also includes the current year’s net income after federal taxes on earnings (see subsection 3 of NAC 706.855) as well as any dividends paid (see subsection 4 of NAC 706.855) as shown on the income statement.

     8. The account for sundry adjustments to surplus includes any adjustments due to discount on capital stock or clearing through the account for other paid-in capital described in subsection 3. This account must also be charged whenever expenses and premium, less discounts, exceed any gains due to resale or cancellation of reacquired stock included in the account for other paid-in capital.

     [Taxicab Auth., Uniform System of Accounts Reg. §§ 361-385, eff. 12-24-70; A 11-16-79]