Frequently Asked Questions

Guidelines for Citing BEA Information | ID: 1017 | Created: Jan-29-2013
Answer

How did special and accelerated dividends affect the national income and product accounts in the fourth quarter 2012?

In the fourth quarter 2012, an atypical number of companies paid special and/or accelerated dividends. Users of the national income and product accounts (NIPAs) will see the impact on the estimates of personal income released on January 30, 2013. The effect of these dividends payments on undistributed corporate profits will be seen when BEA releases its estimates of corporate profits for the fourth quarter of 2012 on March 27, 2013. It is important to note that the estimate of gross domestic product (GDP) will not be affected because these dividend payments do not represent income associated with current period production of goods and services. Similarly, the estimate of gross domestic income, which is conceptual equivalent to GDP, will not be affected. However, the NIPAs include a number of detailed accounts, such as the personal income and outlays account and the government receipts and expenditures account, which are affected by dividend payments.

The NIPAs include estimates of net dividends paid by corporate business, derived as the difference between dividends paid by corporations less those received by corporations. Net dividends paid are subtracted from profits before tax to derive undistributed profits. The NIPAs also include estimates of the value of these dividends distributed to persons, government, and the rest of the world.

Estimates of dividend payments to persons are derived using a three-month moving average of data on dividend payments provided in publically available corporate financial statements. A three-month moving average is used in order to minimize volatility related to changes in the mix of companies reporting from month to month. In the event that special or accelerated dividend payments are known to have been paid out, BEA makes an adjustment to its normal methodology to ensure that the special dividend payments are recorded in the actual month they are paid out. It is worth noting that monthly estimates of dividends received by persons in the NIPAs will differ from source data because the components of the NIPAs are presented at annual rates.

For more information regarding the special and accelerated dividends paid in the fourth quarter of 2012 please see the “Technical Note” that BEA issues concurrently with each of the quarterly GDP releases.

For more information regarding the impact on personal income of special and accelerated dividends paid in the fourth quarter of 2012 please see BEA’s “Personal Income and Outlays, January 2013” report released on March 1, 2013.

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