Account 261 – Equity securities
Posted: Tue Feb 11, 2025 8:23 am
Account 261 belongs to class 2 of the PCG . It is reserved for equity securities, i.e. shares or units held in companies whose aim is to create a lasting link. These securities allow the company to participate in the management or control of the company in which it invests.
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Account 261: What is it?
Account 261 – Equity securities , is part of class 2 – fixed asset accounts of the General Accounting Plan (PCG) . The latter groups together the shares and social shares held by a company in another company.
This type of security aims to allow the investing company to create a lasting link with the target company, often to exercise influence or control over it .
This account includes in particular:
Actions conferring significant power ;
Shares in subsidiaries or affiliated companies;
Majority control investments .
Rules for using account 261
The recording of equity securities must imperatively follow several accounting rules:
Valuation upon acquisition : When purchasing, securities must be recorded based on their initial acquisition cost , which includes incidental costs such as notary fees or commissions;
Depreciation of acquisition costs : Acquisition costs are in principle depreciated over 5 years . If a company does not wish to depreciate them, it must reintegrate 4/5 of the amount in the first year (adjusted pro rata) and deduct 1/5 in the following years. Furthermore, if the securities are immobilized, exceptional depreciation must be recorded for 5 years ;
Depreciation of equity securities : At the end of the financial year, equity securities must be valued by comparing their purchase cost (entry value) with their value in use (inventory value). If the inventory value is lower than the entry cost, this indicates a latent loss, requiring the recording of a depreciation in the accounts.
Examples of accounting operations1. Registration of the purchase of equity securities
Let's say your company acquires shares for €100,000 in order to acquire shares in another company. The entry to be made is as follows.
Did you know?
Indy helps the self-employed with their accounting! You no longer have to master the General student data Accounting Plan at your fingertips, Indy classifies your transactions in the right accounts!
I discover Indy
Account 261: What is it?
Account 261 – Equity securities , is part of class 2 – fixed asset accounts of the General Accounting Plan (PCG) . The latter groups together the shares and social shares held by a company in another company.
This type of security aims to allow the investing company to create a lasting link with the target company, often to exercise influence or control over it .
This account includes in particular:
Actions conferring significant power ;
Shares in subsidiaries or affiliated companies;
Majority control investments .
Rules for using account 261
The recording of equity securities must imperatively follow several accounting rules:
Valuation upon acquisition : When purchasing, securities must be recorded based on their initial acquisition cost , which includes incidental costs such as notary fees or commissions;
Depreciation of acquisition costs : Acquisition costs are in principle depreciated over 5 years . If a company does not wish to depreciate them, it must reintegrate 4/5 of the amount in the first year (adjusted pro rata) and deduct 1/5 in the following years. Furthermore, if the securities are immobilized, exceptional depreciation must be recorded for 5 years ;
Depreciation of equity securities : At the end of the financial year, equity securities must be valued by comparing their purchase cost (entry value) with their value in use (inventory value). If the inventory value is lower than the entry cost, this indicates a latent loss, requiring the recording of a depreciation in the accounts.
Examples of accounting operations1. Registration of the purchase of equity securities
Let's say your company acquires shares for €100,000 in order to acquire shares in another company. The entry to be made is as follows.