Preferred Stock Dividends Plan Advanced by US Accounting Board

The US accounting board advanced an effort clarifying how companies should measure in their financial reports certain dividends they pay out to shareholders.

The Financial Accounting Standards Board voted unanimously Wednesday to finalize a tailored plan that has garnered broad support. The effort aims to fill a gap in the US rulebook by implementing guidance on how issuers should initially measure paid-in-kind dividends on equity-classified preferred stock.

FASB staff said the plan will increase comparability across financial statements, providing benefits to users of financial statements like investors and analysts.

“This is one I feel real good about,” FASB member ...