Accrued Dividend

An accrued dividend is remuneration owed by a company to its shareholders. Forms of an accrued dividend can be either cash or additional shares of stock. From the declaration date, an accrued dividend is recorded on the company’s balance sheet as a liability, where the accrued dividend remains until the payment date. Between declaration and record dates, should the company engage in a merger or a refunding of preferred issues, the accrued dividend remains a liability and the shareholder becomes a higher ranking creditor than other similarly situated shareholders who are not shareholders of record. The timing of accrued dividend payments is normally a few weeks. However, there are currently no accounting rules or securities laws specifying a time frame when an accrued dividend must be paid.

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