Dividends become a liability of the corporation:

Question

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Dividends become a liability of the corporation on the declaration date, which is the date when the board of directors officially announces its decision to pay a dividend. This is the point at which the amount of the dividend is fixed and becomes a binding obligation of the company. The payment date is when the actual cash or stock dividend is paid out to shareholders, while the date of record is the cut-off date for determining which shareholders are eligible to receive the dividend. The day immediately following the date of declaration is not relevant in terms of the liability of the corporation.

Dividends Become a Liability of the Corporation