US Board Seeks Input on ‘Paid-in-Kind’ Dividends Accounting Plan

The US accounting board is asking for public input on a targeted project to address how companies should initially measure “paid-in-kind” dividends on equity-classified preferred stock that they issue.

The Financial Accounting Standards Board released a draft plan Tuesday that aims to reduce variety in companies’ financial reporting by providing streamlined measurement guidance. For businesses that report earnings per share, this diversity in accounting can affect the amount of income available to common shareholders, the plan said.

The plan relates to dividends that, for example, issuers can pay by increasing the original preferred stock’s liquidation value. The proposal seeks to ...