Accounting for shares and trusts
Produced in partnership with William Franklin
Accounting for shares and trusts

The following Share Incentives guidance note Produced in partnership with William Franklin provides comprehensive and up to date legal information covering:

  • Accounting for shares and trusts
  • Relationship with accounting
  • Accounting for new shares
  • Accounting for existing shares and trusts

Relationship with accounting

As well as share based payments (SBP) accounting for the costs of employees, share schemes usually involve accounting for the issue of new shares or for the trusts needed to hold shares to satisfy share scheme awards. This accounting is separate from SBP accounting.

For further information on SBP accounting, see Practice Notes: Introduction to accounting for share-based payments, Overview of the equity settled share based payments accounting regime and Analysis of cash settled share based payments accounting regime.

Accounting for new shares

The issue of new shares usually gives rise to the following double entries:

Debit Cash
Credit Share Capital
Credit Share Premium

If shares are bought back and held in Treasury to then satisfy share awards, the double entry is: