When a share dividend is less than 20-25 percent of the ordinary shares outstanding, a company is required to transfer the fair value of the shares issued from retained earnings.

Question

Quizplus · Accepted Answer

When a share dividend is less than 20-25%, it is considered a small stock dividend, and the company must transfer the fair value of the shares issued from retained earnings to the common stock and additional paid-in capital accounts.

When a Share Dividend Is Less Than 20-25 Percent of the Ordinary