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- Title
ASSET VALUATION IN DIVIDEND DECISIONS.
- Authors
Briggs, L. L.
- Abstract
The article focuses on asset valuation in dividend decisions. The law is greatly concerned with keeping intact the amount of capital contributed by stockholders so that most of the general corporation statutes prohibit the payment of dividends from that contribution. This limits the source of such corporate distributions to surplus, which is the excess of the assets over liabilities and capital. In order to determine whether or not a corporation has a surplus, it is necessary to value the assets so that a comparison may be made with the total of the liabilities and the capital stock. The paper reviews the Great Britain and the U.S. dividend decisions involving asset valuation with the object of learning what assets are recognized and how they are valued by the courts when they compute the amount of surplus available for dividend purposes. In the valuation of corporate assets, money due but not actually received may be considered if there is no reasonable question of payment. Among the receivables recognized in the dividend decisions are accounts, notes, overdrafts, loans, bonds and guaranties.
- Subjects
UNITED Kingdom; UNITED States; DIVIDENDS; ASSETS (Accounting); CAPITAL; VALUATION; STOCKHOLDERS; CORPORATE finance
- Publication
Accounting Review, 1934, Vol 9, Issue 3, p220
- ISSN
0001-4826
- Publication type
Article