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Property dividend belongs in a dated, class-level equity analysis. A property dividend distributes a noncash asset to owners. Before recording the distribution, measure the asset under the guidance that applies to it and recognize any required change in carrying amount.
Apply it
Assume an investment with a $90,000 carrying amount has a supported $120,000 distribution-date measure. The entity first records the required $30,000 measurement effect, then records and settles the $120,000 distribution obligation.
Review property dividend against cash dividend. Reconcile property dividend to liquidating dividend, the dated property dividend evidence, and its final presentation.
The property dividend record ties cash dividend to its source date, measured amount, and liquidating dividend effect.
Keep the boundary clear
The asset's accounting model controls its measurement; Topic 505 does not turn every carrying amount into the dividend amount. A spinoff or common-control distribution may follow a different route.
Authority
Read ASC 505-10-15-2 for scope of equity transactions and activities.
Put the concept to work
Apply this concept
- Explain and apply property dividend within a reconciled class-level equity workpaper using supplied authoritative facts.
Learning resources
Choose a lesson, try an application, or inspect the sources behind this concept.
Build on these ideas
- Cash dividend — Apply
To apply this concept: Required. This prior idea supplies the quantities or classification needed for the current analysis.