If a dividend is declared but not yet paid for an investment in shares owned at year end,the company may accrue dividend revenue.

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If a dividend is declared but not yet paid for an investment in shares owned at year-end, the company may recognize the revenue by accruing it. This means that the company will record the amount of the declared dividend as revenue in its financial statements, even though it has not yet received the cash. The accrual accounting method recognizes revenue when it is earned, not when the cash is received. Once the dividend is paid, the accrual is reversed, and the cash is recorded in the company's account.

If a Dividend Is Declared but Not Yet Paid for an Investment