{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/505/946/#55-implementation-guidance-and-illustrations","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"505","topic_title":"Equity","subtopic":"505-946","subtopic_title":"Financial Services—Investment Companies","section":{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"505-946-55-1","para":"55-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_141FC005-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">This Example illustrates the <a href=\"/glossary/r/#record-share-method\" class=\"term\" title=\"A method to calculate distributions to shareholders from net investment income in which the sum of net investment income available for all classes after deducting allocated expenses, but before consideration of class-specific expenses, is divided by the total outstanding shares on the dividend record date for all classes to arrive at a gross dividend rate for all shares. From this gross rate, an amount per share for each class (the amount of incremental expenses accrued during the period divided by the record date shares outstanding for the class) is subtracted. The result is the per-share dividend available for each class.\"><span>record-share</span></a>, <a href=\"/glossary/a/#actual-income-available-method\" class=\"term\" title=\"A method to calculate distributions to shareholders from net investment income in which actual net investment income that has been allocated to each class (as recorded on the books) is divided by the record date shares for each class to derive the dividend payable per share.\"><span>actual-income-available</span></a>, and <a href=\"/glossary/s/#simultaneous-equations-method\" class=\"term\" title=\"A method to calculate distributions to shareholders from net investment income that seeks to ensure, by using simultaneous equations, that the distribution rates will differ among the classes by the anticipated differential in expense ratios.\"><span>simultaneous-equations</span></a> methods generally used to calculate distributions to shareholders from net investment income. </span></span> <ul class=\"ul simple\" id=\"d3e19024-115880__GUID-32ABB79B-1FA9-4ADA-AC5C-38FD702F23E7\"> <li class=\"li\" id=\"d3e19024-115880__SL6350114-115880\"> <div class=\"p\"> <div class=\"fig figure fignone\" id=\"d3e19024-115880__tbl-d3e19045\"> <img src=\"/asc-img/GUID-C43E1DB4-278D-421C-8CC3-5C21DEF4B1B7-low.gif\" altsource=\"GUID-C43E1DB4-278D-421C-8CC3-5C21DEF4B1B7-low.gif\" alt=\" \" loading=\"lazy\"> <span class=\"sfragment\" id=\"sfr_141FC400-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"></span></span> <div class=\"figcaption\"> Total Class A Class B Assumptions: Net investment income before class specific expenses \" $1,000,000 \" Class-specific expenses: Class A \" $13,000 \" Class B \" $59,000 \" Record date shares outstanding \" 5,000,000 \" \" 2,000,000 \" \" 3,000,000 \" Record Share Method Net investment income before class specific expenses \" $1,000,000 \" Total record date shares outstanding \" 5,000,000 \" Gross dividend rate for all shares $0.2000 $0.2000 $0.2000 Per share class-specific expenses: \"Class A ($13,000 ÷ 2,000,000)\" (0.0065) \"Class B ($59,000 ÷ 3,000,000)\" (0.0197) Per share dividend for each class $0.1935 $0.1803 Actual Income Available Method Actual net investment income recorded on books of each class \" $928,000 \" \" $417,600 \" \" $510,400 \" Record date shares outstanding for each class \" 2,000,000 \" \" 3,000,000 \" Per share dividend for each class $0.2088 $0.1701 Simultaneous Equations Method \"EQUATION #1: A + B = $928,000\" Where—A and B represent the total dividend amounts to be paid to each class. \"EQUATION #2: (A ÷ 2,000,000) - (B ÷ 3,000,000) = (0.5% x $10.50) ÷ 4\" Where \"2,000,000 and 3,000,000 represent the record date shares of each class\" 0.5% represents the expense differential between Class A and Class B $10.50 represents the average daily net asset value of the fund 4 refers to the fact that the dividend period is a quarter Solving the above simultaneous equations produces the following results: Total Class A Class B Total dividends to be paid \" $928,000 \" \" $386,961 \" \" $541,039 \" Record date shares outstanding for each class \" 2,000,000 \" \" 3,000,000 \" Per share dividend for each class $0.1935 $0.1803 Annualized distribution rates to average daily net asset value 7.37% 6.87% Difference in distribution rates 0.50% </div></div> </div> </li> </ul> </div> </div>","snippet":"This Example illustrates the record-share, actual-income-available, and simultaneous-equations methods generally used to calculate distributions to shareholders from net investment income.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e793c96f0beb8178369392332a6ae5df9e086ed3eab76d63d93207ad08bc137f","downloaded_from":"2026-09-10T00:40:58.343Z","last_downloaded_at":"2026-09-10T00:40:58.343Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478248","source_sha256":"4f708099c6d2462a9aec3486a5548af9a7742cb8dddd4d0e399adcde86b3867a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:de885ae070da2e52fcfb689bd97cee6fe1cdea0483c2da37bf3c3ae2b2598c14","downloaded_from":"2026-09-10T00:40:58.343Z","last_downloaded_at":"2026-09-10T00:40:58.343Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478248","source_sha256":"4f708099c6d2462a9aec3486a5548af9a7742cb8dddd4d0e399adcde86b3867a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6501d7fd0319d0d2a2eae8f84fa0890a080356d07f55329f1033ec5ccccbf937","downloaded_from":"2026-09-10T00:40:58.343Z","last_downloaded_at":"2026-09-10T00:40:58.343Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478248","source_sha256":"4f708099c6d2462a9aec3486a5548af9a7742cb8dddd4d0e399adcde86b3867a"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6501d7fd0319d0d2a2eae8f84fa0890a080356d07f55329f1033ec5ccccbf937","downloaded_from":"2026-09-10T00:40:58.343Z","last_downloaded_at":"2026-09-10T00:40:58.343Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478248","source_sha256":"4f708099c6d2462a9aec3486a5548af9a7742cb8dddd4d0e399adcde86b3867a"}}