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Dividends are considered a liability for a company once they are declared by the board of directors but not yet paid. This is because they represent an obligation to distribute a portion of the company’s earnings to shareholders. However, for shareholders, dividends can be viewed as an asset since they provide a return on investment and can contribute to cash flow. Thus, the classification of dividends depends on the perspective: a liability for the company and an asset for the shareholders.

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∙ 11mo ago

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