Illustration of FASB ASU 2026-01 — initial measurement of paid-in-kind PIK dividends on equity-classified preferred stock at the stated rate under Topic 505
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FASB ASU 2026-01: PIK Dividends on Preferred Stock Explained

BySW Accounting admin

How does FASB ASU 2026-01 change the accounting for PIK dividends on preferred stock? In April 2026, the FASB issued Accounting Standards Update No. 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. It fills a gap in U.S. GAAP that had produced diversity in practice. The new rule: an issuer…

Pik dividends measurement asu 2026 01 featured
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PIK Dividends Measurement: ASU 2026-01 New FASB Guidance

BySW Accounting admin

What is the new PIK dividends measurement rule under ASU 2026-01? Issuers must measure paid-in-kind dividends on equity-classified preferred stock by multiplying the stated PIK dividend rate by the liquidation preference of the shares — eliminating the prior diversity in practice between discretionary and nondiscretionary approaches. On April 23, 2026 the FASB issued ASU 2026-01,…