What Is a Liquidating Dividend?
The liquidation dividend refers to the cumulative distribution of profits or cash dividends obtained by the investee company over the amount of the accumulated net profit or loss generated by the investee after the investment is enjoyed by the investment company. In short, the liquidation dividend is the return of capital. Not the return of capital.
Liquidation dividend
Right!
- Chinese name
- Liquidation dividend
- nature
- dividend
- Attributes
- Liquidation
- category
- Housekeeping
- The liquidation dividend refers to the cumulative distribution of profits or cash dividends obtained by the investee company over the amount of the accumulated net profit or loss generated by the investee after the investment is enjoyed by the investment company. In short, the liquidation dividend is the return of capital. Not the return of capital.
- new"
- For the treatment of liquidation dividends under the equity method, the old and new regulations are quite different:
- Although Article 7 of the "Accounting Standards for Business Enterprises No. 2-Long-term Equity Investment" provides a method for liquidating dividends under the cost method, the same applies to the method for liquidating dividends under the equity method. That is, the equity method and the cost method treat liquidation dividends exactly the same.
- Article 1 of the Interpretation of Accounting Standards for Business Enterprises No. 3 stipulates that the liquidation of dividends under the cost method shall recognize investment income, but it does not apply to the treatment of liquidation of dividends under the equity method.