Liquidating dividend accounting entry Web camera russia online seks
A scrip dividend (also called a liability dividend) occurs when the board of directors declares a dividend and issues promissory notes, called scrips, to the shareholders.Stock Dividends: A stock dividend is proportional distribution to shareholders of additional common or preferred shares of the corporation.The date of declaration is the date the Board of Directors formally authorizes for the payment of a cash dividend or issuance of shares of stock.This date establishes the liability of the company.In this case the market value of the dividend should be capitalized.Stock Splits A stock split is a change in the number of shares outstanding with no change in the recorded capital accounts.Then, if the total declared dividend is larger than these two amounts, the excess id divided on a pro rata basis between the two share classes.Shares may be partially participating or fully participating.
The date of record does not require a formal accounting entry. The date of payment or distribution is when the dividend is given to the stockholders of record.
Liquidating dividends are appropriate when there is no intention or opportunity to conserve resources for asset replacement.