#Registration of investment accounting
The start of every company is usually with investment. That is, the partners consider an amount as capital and start operating after registering the company and depositing the capital.
The initial investment may be non-cash in addition to cash. For example, one of the partners gives a vehicle to the company or names a building as an office in the name of the company.
Now, according to what was said, we will start with a simple example for better understanding.
Example:
The following financial event has taken place to start the activity of company A.
Mohammad and Hassan decided to establish A company in April. After registering the company, Mohammad opened a current account in the National Bank in the name of himself and his partner and deposited the amount of 50,000,000 Rials as the capital of the company into that account.
Analysis:
With the establishment of the company, an economic unit that belongs to Mr. Mohammad and Hassan and with a legal personality independent from them is created.
By opening a current account and depositing an amount of 50,000,000 Rials into this account, an asset item called cash and bank is created in the company, the counterparty of which is the capital account.
Its accounting record is written in the newspaper as follows:
Bank 50000000
Capital 50000000
For the initial investment of Mohammad and Hassan in cash
Non-cash investment:
Sa Khatman ****
land ****
Other assets ****
capital *
Registration of initial investment in non-cash form.
* Here, I need to explain, in order to increase the capital of commercial companies, a special administrative procedure must be done in the company registration office, and after registration in the official gazette, it is possible to register the accounting in the company’s offices.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
Link to the audit accounting clinic
https://t.me/joinchat/BnzBsTuioTshiXBwf9bBPQ