My company just wrapped up fund raise through Reg A; since there is no par value, means there is no add'l paid-in-capital. Question is for the expense that was occured related to Reg A fund raise (such as legal fee, payment process fee and etc.), what is correct to book these expenses? (one of
Accounting for capital raise through Reg A
Answers
Although most texts make reference to deducting the direct expenses from a capital stock offering from additional paid in capital, the SEC only mentioned the costs should be deducted from the gross proceeds of the offering. I would assume this is either the capital stock account or APIC. If there is no APIC, then it would net against the capital stock account.
http://www.sec.gov/interps/account/sabcodet5.htm#A
Ted is correct but you can also capitalize them as syndicatilon costs (no amort) and organization costs (60 month amort).
1
My understanding is that syndication costs relate to partnership structures and not corporations. Since we are talking about capital stock, I don't think the treatment as syndication or organizational costs would be appropriate under GAAP or under IRC 709(b)
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