The Accounting Review Vol. 36 No. 3 1961
DIVIDENDS AND THE LAW.
Abstract
Liberal legislative policy has resulted in the enactment of provisions in many states which allow corporations to declare dividends from sources other than earned surplus. Distributions to shareholders from these other sources are of three types: (1) current earnings dividends, which are permitted to the extent of all or a portion of current net income when a corporation has a deficit; (2) depletion dividends, which may be distributed to the extent of the increase in net income which results when the depletion charge against revenue is ignored; and (3) dividends charged to paid-in surplus. In those states which allow current earnings and/or depiction dividends, consistency requires that paid-in surplus be made available as a legal source for cash or property dividends since distributions from any of these sources result in an offset to or direct reduction of paid-in capital.
- DOI
- 10.2308/tar-7096366
- Volume
- 36
- Issue
- 3
- Pages
- 434-438
- Language
- en
- Sources
- openalex crossref