Accrued dividends should not be confused with accumulated dividends, which refer to dividends due to holders of cumulative preferred stock.
There are no accounting rules that mandate a time frame in which the accrued dividend entry should be recorded, though most companies usually book it a few weeks before the payment date. After the dividend is declared, it becomes property of the record-date shareholder and is considered separate from the stock. This separation allows the shareholders to become creditors of the company, due their dividend payment, should a merger or some other corporate action occur.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
accrued dividend — /əˌkru:d ˌdɪvɪ dend/ noun a dividend earned since the last dividend was paid … Dictionary of banking and finance
accrued dividend — noun : a dividend earned or assumed earned at a specified rate on cumulative preferred stock but not declared or paid * * * an accumulated unpaid dividend on preferred stock … Useful english dictionary
accrued dividend — an accumulated unpaid dividend on preferred stock. * * * … Universalium
accrued dividend — A share of net earnings declared but not yet paid as a dividend … Black's law dictionary
accrued dividend — A dividend which became due and has either been paid or not paid. 19 Am J2d Corp § 809 … Ballentine's law dictionary
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dividend stripping — bond washing The practice of buying gilt edged security after they have gone ex dividend (see ex ) and selling them cum dividend just before the next dividend is due. This procedure enables the investor to avoid receiving dividends, which in the… … Big dictionary of business and management
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accrue — ac·crue /ə krü/ vb ac·crued, ac·cru·ing [Middle French accreue increase, addition to a property, from feminine of accreu, past participle of acreistre to increase] vi 1: to come into existence as an enforceable claim: vest as a right… … Law dictionary