The accounting process of a joint-stock company serves as a guiding principle for businesses to operate their finances transparently, professionally, and optimize risk management. From the in-depth perspective of Chief Accountants, this article analyzes in detail each accounting step, including equity transactions, treasury stock, dividend distribution, and common risks, while suggesting optimal solutions according to Vietnamese standards and the latest IFRS roadmap. This is a practical guide that helps investors, small and medium-sized enterprises (SMEs), and startups understand financial mechanisms, ensure legal compliance, and increase attractiveness to shareholders.
What is the accounting process for a joint-stock company?
The accounting process of a joint-stock company is a system of steps and methods that a joint-stock company uses to record, control, process, and report financial and accounting transactions. The goal of this process is to ensure that financial information is transparent, accurate, and compliant with the law, while also helping management make effective decisions.
In the context of 2026, this process is not just about bookkeeping and accounting, but also a tool for risk management, shareholder oversight, and preparation for audits.
Key characteristics of the accounting process in a joint-stock company.
The accounting process of a joint-stock company has its own unique characteristics, requiring transparency, strict control, and compliance with legal standards. Specifically, important factors to note include:
- Transparency with shareholders: Financial reports must accurately reflect the value of shares and profits.
- Strict internal oversight: Important transactions must be approved by the Board of Directors or the General Meeting of Shareholders.
- Audit compliance: Most large joint-stock companies are required to have their annual financial statements audited.
- Specialized accounting system: Includes equity (Accounts 411, 4111, 4112), treasury stock (Account 419), undistributed profits (Account 421), and dividend payment obligations (Account 3388).
Once you understand the concepts and characteristics of the accounting process in a joint-stock company, the next step is to thoroughly understand the chart of accounts and specialized accounting methods, which form the basis for accurately recording financial transactions, managing equity and dividends, and ensuring transparency to shareholders and tax authorities.
Reference: Accounting procedures for FDI enterprises.
Basic accounting methods for accounting operations in joint-stock companies.
During its operation and development, a joint-stock company generates many specific accounting transactions related to its charter capital, shareholder rights, and fundraising activities. Mastering the basic accounting methods for joint-stock company transactions helps accountants accurately record the economic nature of transactions, ensuring compliance with legal regulations and minimizing the risk of errors in financial reporting. In practice, common transactions include:
Business registration procedures for contributing capital to establish a company:
- Record the actual capital contribution of shareholders according to the type of asset contributed (cash, bank transfer, or physical assets).
- Keep separate records of fully contributed capital and committed but uncontributed capital to ensure compliance with the Enterprise Law.
- Carefully review accompanying legal documents such as the articles of incorporation, list of founding shareholders, and capital contribution records.
Transactions related to changes in charter capital:
- Increase capital through the issuance of additional shares to existing shareholders or new investors.
- Reduction of charter capital due to share buybacks, capital recovery, or handling of accumulated losses as prescribed by regulations.
- All surpluses or differences arising from capital adjustments must be fully accounted for, ensuring that the equity structure is accurately reflected.
Bond issuance operations:
- Record the capital raised from bonds as a long-term debt obligation of the business.
- Track bond interest details, including maturity, interest rate, and related issuance costs.
- Regular cost allocation and interest accounting are essential to accurately reflect the company's financial obligations.
Dividend distribution to shareholders:
- Determine the source of dividend payments from undistributed after-tax profits or other legal funds.
- Cash dividends and stock dividends should be accounted for separately, in accordance with their economic nature.
- Monitor the obligation to deduct and pay personal income tax on dividends paid to shareholders.
Operations related to the reorganization and dissolution of joint-stock companies:
- Record and process accounting transactions during business mergers, consolidations, or splits.
- Complete the settlement of all financial obligations, debts, and taxes before dissolution.
- Liquidate assets and distribute the remaining value to shareholders in accordance with priority order and legal regulations.
The chart of accounts and details of specialized accounting methods.
To operate the accounting process of a joint-stock company, the chief accountant needs to pay special attention to the Equity account group and the financial transactions that arise.
Accounting for capital contribution transactions in company establishment.
To understand the mechanism of capital formation and recognition in a joint-stock company, businesses need to have a firm grasp of the legal regulations related to the issuance of shares, the obligations of founding shareholders, and the principles of accounting for contributed capital. Specifically:
- Capital raising mechanism: Joint-stock companies raise capital for business operations by issuing shares to investors.
- Responsibilities of founding shareholders: According to current Vietnamese law, within the first three years from the date of establishment, founding shareholders are required to hold a minimum of 20% of the total number of common shares planned for issuance by the company.
- In the case of no external capital raising: If all the company's shares are subscribed for by the founding shareholders, the business does not conduct a public offering of shares.
Legal forms of equity capital contribution can be made in the following ways:
- Vietnamese Dong;
- Freely convertible foreign currency;
- Yellow;
- Value of land use rights;
- Intellectual property rights, technology, and technical know-how;
- Other types of assets as stipulated in the company's charter.
Capital contributions must be paid in full at once, not in installments. The accounting account used to record the capital contributions of shareholders in a joint-stock company is account 411 – Business Capital, as stipulated by the current accounting regulations.
Accounting for transactions related to the issuance of shares to raise capital.
During the process of issuing shares and receiving capital contributions from investors, the recording of share purchase deposits must be done correctly according to accounting principles and tracked in detail for each shareholder. Below are the accounting methods and important notes that corporate accountants need to be aware of:
- When a business receives a deposit from an investor to register for a share purchase, the accountant records the transaction based on the bank's credit advice.
Accounting pen:
- Debit Account 144 – Stock Purchase Deposit: Reflects the actual deposit amount collected.
- Account 138 (1388) – Other receivables: Record the amount of money shareholders have deposited to buy shares.
Accountants need to track details for each shareholder, including:
- Number of shares registered for purchase
- The corresponding deposit amount for each investor.
In practice, newly established companies, when conducting initial public offerings (IPOs) to raise capital, often offer shares at a price lower than par value to attract investors.
Payment for the shares can be made in the following ways:
- Pay in full at the time of purchase, or
- Payments will be made in installments, based on the decisions of the Board of Directors and the Management Board of the enterprise.
Accounting for the distribution of shares to shareholders.
Based on the par value and issue price of the shares, the accountant records:
- Recording receivables from shareholders: Debit Account 138 (1388 – Other receivables) reflects the amount shareholders must pay to the company according to the approved share issuance price.
- Recording share capital at par value: Account 4111 (Registered share capital) is recorded at the par value of the number of shares issued to shareholders.
- Record any share premium (if any): Debit account 4112 (Share Premium) to reflect the difference between the issue price and the par value of the shares.
Notes on managing the details of equity capital contributions:
- To accurately track capital contributions, the accountant of a joint-stock company should open detailed accounts, including: Account 4111 (Registered Share Capital) and Account 4111 (Distributed Share Capital).
- When distributing shares to shareholders: Accountants are responsible for meticulously tracking the number of shares sold and updating shareholder information in the shareholder list as required.
- Payment method for share purchase: Payment can be made in a single lump sum at the time of purchase or in installments, based on the decision of the Board of Directors and the Management Board.
Accounting for cash and assets contributed to the purchase of shares.
Record the amount paid for the shareholders' stock subscription:
- Debit Account 144 – Amount paid for stock purchases
- There is account 1388 – Other receivables from shareholders.
This reflects the additional amount shareholders still need to pay when subscribing to shares.
In the case where a shareholder pays for shares with assets:
- Businesses must establish an Asset Valuation Council to determine the fair value at the time of capital contribution.
- Based on the valuation results, the accountant records: Debit accounts 152, 153, 156, 211, 213,… (depending on the type of asset contributed) at the value accepted by the Board. Credit account 1388 (Other receivables from shareholders).
Record the payment for the stock purchase obligation using assets instead of cash.
Transferring registered share capital to actual contributed share capital:
- Debit Account 4111 – Registered Share Capital Purchase
- Account 4111 – Share capital (based on the par value of issued shares)
Officially recording the shareholder's capital contribution to the company's charter capital.
Record the transaction if the order amount exceeds the amount due.
Based on the document for the refund of excess share purchase money, the accountant records:
- Debit Account 138 (Account 1388 – Accounts Receivable from Shareholders)
- Account 144 – Deposits for stock purchases.
The excess funds from the share subscriptions have been refunded to the shareholders.
Accounting for the completion of the share issuance.
Upon completion of the share subscription procedures, the company transfers funds from the blocked account to the payment account. The accountant records the amount received from the share issuance and simultaneously transfers the previously tracked subscription funds.
Corresponding accounting entry:
- Debit accounts 111 and 112: Reflect the actual amount of money the business receives from investors;
- Credit Account 144 – Share Subscription Funds: Transfer the subscription funds after successful share issuance.
Upon completion of the share distribution to shareholders, the accountant records the increase in the number of outstanding shares at the par value of the issued shares.
Accounting entry for tracking outstanding shares:
- Debit Account 010 – Outstanding Shares: Record the par value of the shares officially delivered to shareholders during the issuance.
In summary, the issuance of shares is accounted for in stages, from receiving the subscription payment to the official distribution of shares to shareholders. Proper accounting not only accurately reflects the cash flow and number of outstanding shares but also ensures transparency, compliance with accounting regulations, and provides a solid foundation for auditing and financial reporting of the enterprise.
Reference: Accounting procedures for limited liability companies (LLCs) 2026.
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Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
MAN Editorial Board – Master Accountant Network
