What is ACCRUED INTEREST

The interest on a BOND or LOAN that has been earned but not yet paid. Interest payable/receivable accumulates between COUPON payment periods; once a periodic interest payment is made, accrued interest reverts to zero and begins building on a daily basis until the next payment. Accrued interest of a FIXED INCOME instrument can be computed via: where C is the coupon, AD is the actual number of days that have elapsed since the last coupon, and n is number of days in the coupon period. See also CLEAN PRICE , DIRTY PRICE . ACCUMULATED DIVIDEND A DIVIDEND that has been declared, but not yet paid, to investors holding CUMULATIVE PREFERRED STOCK . No dividends are payable to holders of COMMON STOCK until accumulated dividends have been paid. Since accumulated dividends are contractually owed to investors, they are reflected as a LIABILITY on the issuer