Accrued Dividend

What is an 'Accrued Dividend'

An accounting term referring to the balance sheet item that accounts for dividends that have been declared but not yet paid to shareholders. Accrued dividends are booked as a liability from the declaration date and remain as such until the dividend payment date.

Accrued dividends should not be confused with accumulated dividends, which refer to dividends due to holders of cumulative preferred stock.

BREAKING DOWN 'Accrued Dividend'

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.

RELATED TERMS
  1. Accumulated Dividend

    A dividend on a share of cumulative preferred stock that has ...
  2. Payment Date

    The date on which a declared stock dividend is scheduled to be ...
  3. Dividend

    A distribution of a portion of a company's earnings, decided ...
  4. Spillover Dividend

    A type of dividend in which the payment year and the taxable ...
  5. Declaration Date

    1. The date on which the next dividend payment is announced by ...
  6. Forward Dividend Yield

    An estimation of a year's dividend expressed as a percentage ...
Related Articles
  1. Investing Basics

    How Dividends Affect Stock Prices

    Find out how dividends affect the price of the underlying stock, the role of market psychology and how to predict price changes after dividend declaration.
  2. Professionals

    Accounting for Dividends

    CFA Level 1 - Accounting for Dividends. Learn the types, terminology and how to account for dividends. See how stock splits and issuance rules affect corporate dividend policy.
  3. Professionals

    Dividends

    We look at types of dividends, payments, policies and investor dividend preferences.
  4. Professionals

    Cash Dividends And Dividend Payment

    Learn how to dividends work.
  5. Markets

    Due Diligence On Dividends

    Understanding dividends and how they work will help you become a more informed and successful investor.
  6. Investing

    The 3 Biggest Misconceptions of Dividend Stocks

    To find the best dividend stocks, focus on total return, not yield.
  7. Professionals

    Dividends and Stock Splits

    Series 7 - Equities Section 3: Dividends and Stock Splits
  8. Stock Analysis

    The Top 5 Dividend Paying Oil Stocks for 2016

    Discover the top five dividend-paying oil companies for 2016 and what factors contribute to their ability to continue dividend payments.
  9. Investing

    What are Preference Shares?

    Preference shares, also referred to as preferred shares, are equity shares that give the shareholders certain rights ahead of common shareholders. For instance, when the corporation declares ...
  10. Forex Education

    Dividend Yield

    Investing is a complex and often daunting experience, these equations are actually quite simple.
RELATED FAQS
  1. Who actually declares a dividend?

    Understand who actually declares a dividend when a company makes a dividend payment and how the payments of dividends appear ... Read Answer >>
  2. Are dividends considered an asset?

    Find out why dividends are considered an asset for investors but a liability for the company that issued the stock, and learn ... Read Answer >>
  3. Do dividends go on the balance sheet?

    Learn about dividends and which accounts on a company's balance sheet they affect, such as cash, shareholders' equity and ... Read Answer >>
  4. Do dividends affect working capital?

    Learn about cash dividends and how they affect a company's working capital through the reduction of cash or recording a dividends ... Read Answer >>
  5. Where can I find the past record dates for a company's cash or stock dividend?

    Learn more about dividend record dates and how they are used to determine the recipient of dividends. Find out how to locate ... Read Answer >>
  6. Can dividends be paid out monthly?

    Find out if stocks can pay dividends monthly, and learn about the types of companies most likely to do so and how monthly ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center