› CFA › CFA Level 1 › How do one account for warrants emission in the balance sheet? Search for:Search Button CFAFRMCAIACareersLounge GeneralLevel 1Level 2Level 3 How do one account for warrants emission in the balance sheet? Reply Login Sign Up This topic has 3 replies, 2 voices, and was last updated Jun-17 by vincentt. Author Posts huwabaraParticipant Summer Associate 04 Jun 2017 at 6:44 pm Up0Down On the asset side, we add the proceeds to the cash. On the liability side, what do we do? Adding it to non distributed earnings doesn’t seem fair. Is it? Thanks for your help on this existential question. vincenttParticipant Associate 04 Jun 2017 at 7:11 pm Up1Down Since, Asset = Liability + Equity Step 1: add cash to asset Step 2: add cash to equity (retained earnings to be specific) That way it would balance out. huwabaraParticipant Summer Associate 04 Jun 2017 at 7:32 pm Up4Down Agreed. But still, that doesn’t seem right to me. It is not even a financing operation per se. So I can deleverage as much as I want, without even requiring equity financing? Am I the only one bothered here? Thanks for your reply @vincentt vincenttParticipant Associate 04 Jun 2017 at 7:43 pm Up1Down The following formula should help you understand better. RE = Beginning RE + Net Income – Dividends Apart from RE in the “Equity” section, there is also Common Stock. Author Posts Viewing 3 reply threads You must be logged in to reply to this topic. Log In Username: Password: Keep me signed in Register This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Log In