Unformatted text preview: the securities markets. Both techniques allow the board of directors to increase the quantity of shares and reduce share prices into a desired “trading range.” For accounting purposes the 20%–25% rule reasonably views large stock dividends as substantive stock splits. In this case, it is necessary to capitalize par value with a stock dividend because the number of shares is increased and the par value remains the same. Earnings are capitalized for purely procedural reasons....
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This note was uploaded on 01/31/2011 for the course ACCT 302 taught by Professor Leee during the Spring '10 term at Grand Rapids Community College.
- Spring '10