CEVAP:

Th e recording process for the transactions about the distribution of share dividends is based on the number of dividends. According to the size of the dividends, share dividends transactions are usually divided into two groups:

• Small share dividends: These are the dividends which are less than 20%–25% of the corporation’s issued shares. To record small share dividends fair market value should be used. Th is practice is based on the assumption that a small share dividend will have little effect on the market price of the shares previously outstanding.

• Large share dividends: These are the dividends which are greater than 20%–25% of the corporation’s issued shares. These types of dividends are rare. But, if a corporation decides on a large share dividend, par value or stated value should be used to record related transactions instead of market value because of the possible important effect of this transaction on the market price of the shares