Liquidating dividend accounting I just want to talk dirty on a free chat site with no registration
In the case of bankruptcy, when and how a borrower liquidates assets is a big deal.If all the debtor's assets are tax-exempt or subject to liens, there may not be any assets to liquidate and hence no money to distribute to creditors.Although this sounds harmless, in the corporate world the term often carries a connotation of failure, because it is most often used in discussions about Chapter 7 -- a section of U. bankruptcy law under which companies and individuals liquidate their assets in order to repay their debts.How It Works Individuals, partnerships or corporations can liquidate assets.Sharon owns 1,000 shares in the Tablet Universe Company and the company just announced that it is paying a liquidating dividend.Sharon has only received regular dividends before and is not familiar with a liquidating dividend. Regular dividends are distributions of the company's profit that the company pays to its shareholders or owners.After the regular dividend is paid out, whatever is left over is the liquidating dividend balance.
Let's examine the impact of this dividend payment on Sharon.
If there are assets to liquidate, however, the creditors usually file a written claim so they can receive some of the proceeds.