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Can you please remind me of the treatment when you acquire a subsidiary and receive a dividend immediately after
There used to be the principle of time apportioning the dividend into pre-acquisition element and post-acquisition element but all that has now stopped. In reality the share price of a company’s shares will probably increase as we get closer and closer to dividend time.
Or, more correctly, when the market declares the share as “ex div” the market price tends to fall by the value of the dividend. Ex div means that anyone buying that share after the market starts to quote it as ex div is not entitled to keep the next dividend. They will actually receive it, but must then pass it back to the person that sold the shares (in practice, back to the stock broker or market maker)
If you think about this, when the parent acquired the shares in the subsidiary from the former members of that subsidiary, the price that the parent will have had to pay will (probably) take into account this forthcoming distribution
So far as you’re concerned, the dividend is recorded in the period during which it was received.
Ok?
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