Accounting for a Stock Dividend
The Federation of Accounting Professions (“FAP”) issued Notification No.15/2557 regarding the accounting guideline for recognition of a stock payment made in the form of additional shares.
Keywords: Mazars, Thailand, Accounting, FAP
4 June 2014
- The company issuing the stock dividend (“investee”) is required to recognise the issued and paid-up ordinary shares at par value and a reduction to the retained earnings for the same amount.
- The company receiving the stock dividend (“investor”) would not recognise any revenue as the dividend did not change the investor’s economic interest.
The accounting guideline will be effective for stock dividend payments beginning on or after 1 January 2014. Retrospective application will be required by investors. However, investees are not required to make any retrospective adjustment.