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How to Calculate Accrued Dividends

Original post by Matt McGew of Demand Media

An accrued dividend is a dividend recognized by a business but not yet paid to shareholders. Generally accepted accounting practices require businesses to record accrued dividends as a liability on financial statements. In some accounting systems, investors can also record accrued dividends as income before receiving the actual dividend distribution from the company. You can manually calculate the accrued dividend with some basic information about the dividend and the number of shares outstanding.

Step 1

Determine the amount of the dividend per share. For example, assume the company declared a dividend of $0.20 per share.

Step 2

Determine the number of shares outstanding. For example, assume the business has 100,000 shares outstanding.

Step 3

Multiply the number of shares outstanding by the declared dividend amount. Continuing the same example, $100,000 x $0.20 = $20,000. This figure represents the company's accrued dividend.

                   

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About the Author

Since 1992 Matt McGew has provided content for on and offline businesses and publications. Previous work has appeared in the "Los Angeles Times," Travelocity and "GQ Magazine." McGew specializes in search engine optimization and has a Master of Arts in journalism from New York University.

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