The accounting approach for recording a stock dividend received on a long-term equity investment is the same whether the cost or the equity method is used by the investor.

Question

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Whether an investor uses the cost or equity method, a stock dividend received on a long-term equity investment is recorded by increasing the number of shares held at the fair value on the date of the dividend declaration. The accounting treatment for the dividend is the same in both methods.

The Accounting Approach for Recording a Stock Dividend Received on a Long-Term