Are stock dividends income?

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1.08K viewsMarch 15, 2021Personal Finance

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Roberts December 2, 2012 0 Comments

Is the stock dividends that a company receives income that needs to be reported and where should I include it in the income statement?

Andrew Answered question March 15, 2021

2 Answers

score 0 · Answer 1 · 2021-03-15T15:17:28+00:00

Yes, dividend income is considered the receipt of economic benefits and so like any other revenue is recognised by the receiving entity.

For most reporting entities, because this type of income does not form part of their normal operations it should be disclosed below operating profit or loss; just as interest generally is. This enables the user of the report to better evaluate the operating and non-operating sides of the entity.

score 0 · Answer 2 · 2012-12-02T17:46:32+00:00

If you refer to the dividends that a company receives from another company, then yes it is income and it usually included in the other income line.

The stock dividends that are paid by a company are not income though and are paid out of the reserves.