A dividend that has not been paid to a holder of cumulative preference shares and is carried forward (i.e. accumulated) to the next accounting period. It represents a liability to the company. The Companies Act requires that where any fixed cumulative dividends on a company’s shares are in arrears, both the amount of the arrears and the period(s) in arrears must be disclosed for each class of shares.
Subjects: Financial Institutions and Services — Accounting.