The work of the Stock Exchange

Bibliographic data

Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

APPENDIX 379 New York Stock Exchange Further Announcement on Stock Dividends The following statement supplements and extends but does not alter the Report of the Special Committee on Stock Dividends adopted by the Gov- erning Committee on September I1, 1929. in the study of the questions leading up to that report and in considering the problems arising out of giving effect to it, the Committee on Stock List has reached the following definite conclusions, which it seems well to make public for the information of corporations desiring listing : As recognition of the importance of earnings in the evaluation of securities tends to be emphasized, the importance of an accurate segre- gated statement of Earned Surplus in the Balance Sheet does so like- wise. Accounting should be adapted to the end that this account should show at any given time the exact amount of realized undistributed earnings, either from date of organization, or, in the event of recapi- talization, from some fixed stated date. The fact that state laws may permit stock dividends to be paid without any charge against earnings or earned surplus or with only a nominal charge has no bearing upon the correct accounting procedure to be foliowed. An occasional large split-up, made for convenience in the form ot a stock dividend and capitalized at a nominal amount, whether charged against Earned Surplus or Capital Surplus is not objectionable, if accompanied by a statement that it is in effect a split-up. The issuance of periodical Stock Dividends with either no charge or with an insufficient charge against Earnings or Earned Surplus, while not illegal under the laws of some States, is apt to mislead stock- holders and is not regarded as good practice. If such dividends are declared they should be accompanied by a statement clearly indicating either that they are not true earned stock dividends, or, if actually earned but insufficiently charged against Earnings or Earned Surplus, that the method of accounting leaves in Earned Surplus an amount which may be again used for dividends without further earnings. In the accounting for Stock Dividends upon the books of the issuing Company, whether for stock with par value or without par value, Capital and Capital Surplus should be regarded together as the con- sideration, other than earnings, represented by the stock. The sum per share of these two accounts is the minimum amount, per share to be issued as a Stock Dividend, which should be charged against Earnings or Earned Surplus in order that such dividend may be termed a true earned Stock Dividend properly accounted for and in order that Earned Surplus may not include a fictitious amount available for further divi- dends without further earnings. In cases where there exist substantial uncapitalized assets, tangible or intangible, the amount of the charge against Earnings or Earned Surplus should be larger than this minimum amount. in cases where stock is issued either as interest upon funded debt or as a dividend upon stock of another class with a cash alternative, the amount of such cash alternative measures the minimum amount properly to be charged against Earnings or Earned Surplus. The effect of issuing stock as interest or dividends upon other securities should be merely to conserve cash and not to add to the apparent Earnings or

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