Stock Dividend vs Stock Split Accounting

Stock dividends and stock splits both increase the number of shares outstanding. However, there are several differences in the accounting for stock dividends and stock splits.

First, a stock split reduces the par value per share, while a stock dividend has no effect on the par value per share.

Second, a stock split doesn't require a journal entry, as it has no effect on the financial statements. A stock dividend, however, does affect the financial statements (the effect depends on whether it is a small stock dividend or a large stock dividend).

Third, a stock dividend increases the common stock account. If the stock dividend is small (less than 20-25% of the shares outstanding), then the stock dividend also reduces the retained earnings account by the fair market value of the stock multiplied by the number of shares being distributed in the stock dividend. If the stock dividend is large (more than 20-25% of the shares outstanding), then the stock dividend reduces the retained earnings account (or the additional paid-in capital account) by the par value of the stock multiplied by the number of shares being distributed in the stock dividend.
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[MartaBurdi]

Great video, I've been interested in investing ever since I came across articles of people making up to $150, 000 and more in this period, thanks for the video but is it really possible for a retail investor to achieve this in months?

[arikaGME]

How many GME HODL’ers trying to understand the dividend?

[TonyDenaro]

In July did a video just like this explaining what was going to happen to GME. What we couldn’t figure out is the Why? Why would a company choose to do a large stock split dividend vs a regular stock split. Any insight would be appreciated.

[name-htqz]

Its really comforting to know I wasn't the only one who found Stock Dividends and Split Stock similar and confusing. Thanks @Edspira for clarifying the concepts

[mot]

This has been suppressed for the past 2 week i searched everywhere for this info(the difference between stock split and stock split in the form of a dividend) i searched all over the web and nothing. On Saturday i searched the same as i have been searching for the past 2 week and this was on the first page of YouTube it was not on the first 30 these past 2 weeks. Algos suppressing the info because of the #GME stock split via dividend. Thank You. I now know why GMEs borrowing rate 4x on Friday. I understand why after watching this.

[DakotaEdens]

How does the stock dividend and stock split affect the total authorized shares? How does it affect the issued shares and unissued shares? Do they take more stock from the unissued shares for the stock dividend? Do they do the same for stock split or do the stocks split from one stock or does it depend on the P/E ratio? Sorry a lot of questions, just want to understand how they affect each other in those ways.

[GameTimeWrestling]

Please compare GME to AMC. Part of the AMC movement and with @Tony Denaro below. Ty

[arjunarun]

Why is it that for a small dividend, common stock has the dividend distributable plug in account but for APIC you can just directly increase it?

[IsabellaAriaum]

The market trend can turn around very quickly. In fact, the indexes often switch from a bear market to a bull market when the news is at its worst and the mood of investors is at its lowest point. I read an article of people that grossed profits up to $150k during this crash, what are the best stocks to buy now or put on a watchlist?

[lindohlily]

how is retained earnings reducing when u are only paying them in shares and not cash?

[jeremypage]

You did a wonderful job explaining this. Thank you.

[jomarjavier]

If only this was uploaded before my exam :(

[ub]

Why would a company choose one over the other?

[go-away-]

If it's between 20-25% outstanding how is it determined if it's a large or small stock dividend? Does the company get to choose?