UK Accounting Glossary
Most commonly, the announcement date is the date on which a company declares dividends. In this usage, announcement date is a synonym for the declaration date. Suppose on the announcement date of May 1 the company’s board declares a quarterly dividend of $.25 on the company’s 500,000 outstanding shares, to be paid on May 31 to shareholders of record on May 15. Because the company incurred a legal liability on the announcement date of May 1, it increases its dividends payable account by $125,000 (500,000 X $.25) and reduces its retained earnings by $125,000. Payment of $125,000 on May 31 reduces cash and extinguishes the liability incurred on the announcement date. More generally, the announcement date is the date the company announces an important financial event. For example, the NASDAQ defines announcement date as the first day a stock split is made public. The announcement date is similarly defined for mergers, tender offers, business combinations, and so on.
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This glossary post was last updated: 4th February 2020.