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Account for shares in Co-operative Banks

The company that opens professional accounts in some so-called corporate banks sometimes buys shares in this bank. The bank is owned by its customers and they also receive dividends.

For accounting purposes, these shares are considered fixed securities.

Read the accounting article on stocks, stocks and securities.

Shares can be fixed securities, equity securities and securities

Shares of a bank are calculated based on their interest in the company and the planned holding period (short term or long term).

When a company buys shares or shares for resale quickly, with preferential profit, we are talking about securities that can be marketed. The shares are listed on 508 other marketable securities.

Marketable securities are cash investment transactions.

When a company buys shares for a long-term purpose, those shares are considered financially stable assets.

Here is a distinction between two types of financially stable assets:

  • Fixed securities: Account 271 Fixed securities non-standard securities of portfolio activity;
  • Investment securities: Account 261 equity securities.

Marketable securities are securities purchased for the purpose of influencing the investment firm. The company owns a certain percentage of the company’s share capital.

Fixed securities are other securities held by the company for a long period of time.

Account 272 Fixed Bonds (Credit Rights) Records Bonds and Warrants. So it can’t be used here.

Shares of a bank: Fixed securities

When a company subscribes to shares in the bank (partner banks) in which it holds its account, it generally has no influence on the decisions made within the bank.

On the other hand, she holds these bonds for a period of time, sometimes until her bank account is open.

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These are therefore fixed bonds, debited to account 271 and credited to account 512.

For example

A company opens an account in a bank that sells two shares for 10 sums each.

271

Subscription of shares in X Bank 20
512

Subscription of shares in X Bank

20

In the following years, Account 512 will be debited and Account 761 will be credited with income from other financially fixed assets to calculate the dividends received on these shares.

For example, how to calculate the shares of SOCAMA, Crdit Agricole or Banque Populaire?

The accounting system for stocks depends on the purpose of the company in relation to these securities. Generally, however, these stocks are listed as fixed securities and will be debited from Account 271.