# Special-Dividend Adjustment

> Preserve Return Meaning Across the Ex-Date

`D02-F02-A04` · Corporate Actions and Security Master Data → Complex Distributions · archetype `record-transform` · difficulty 3/5 · verification **verified**

Full page: https://docs.thefintechbuilder.com/corporate-actions-and-security-master-data/complex-distributions/special-dividend-adjustment/
Agent skill: `npx skills add IslamBaraka90/Fintech-Algorithms-Library` — https://docs.thefintechbuilder.com/guides/agent-skill/

## Install and import

```bash
npm install fintech-algorithms
```

```ts
import { calculate } from "fintech-algorithms/corporate-actions-and-security-master-data/complex-distributions/special-dividend-adjustment";
```

## Signature

```ts
calculate(rawData)
```

Handles a distribution large or irregular enough that treating it as an ordinary dividend misstates the series. The hard part is not the arithmetic but the classification, and this makes that decision explicit and auditable.

## Parameters

| Name | Type | Required | Notes |
| --- | --- | --- | --- |
| `rawData` | `{ securityId: string; eventId: string; asOf: string; methodology: string; eventRevisions: EventRevision[]; referencePrice: object; precedingActions: object[]; fxRate?: object; taxProfile?: object; exPriceObservation?: object }` | yes | `precedingActions` matters because adjustments compose in order — a split applied before or after this distribution gives different answers. `fxRate` and `taxProfile` cover cross-currency distributions and withholding. Point-in-time by construction: `asOf` is the knowledge time, and only revisions available at or before it are eligible. Passing the event date instead of the knowledge date is what lets a backtest use information it could not have had. |

## Returns

`{ eventState, classificationDecision, classificationReason, adjustmentApplied, grossDividendOnEventBasis, netDividendOnEventBasis, … }`

The classification *and the reason for it*, alongside gross and net amounts on the event's own basis. The reason is the point: this is a judgement, and a judgement without its rationale cannot be reviewed.

## Errors

- When the methodology is unrecognised — throws

## Complexity

Time `O(revisions + actions)`, space `O(1)`.

## Worked example

This is the worked example published in the article, replayed by the test suite on every run. The output cannot drift.

### Input

`rawData`:

```json
{
  "securityId": "SYNTHETIC-SECURITY-004",
  "eventId": "SYNTHETIC-SPECIAL-DIVIDEND-2026-01",
  "asOf": "2026-03-16T20:10:00Z",
  "methodology": {
    "id": "SYNTHETIC-NET-RETURN-POLICY",
    "version": "1.0",
    "sourceId": "SYNTHETIC-METHODOLOGY-NOTE",
    "classificationMode": "source-designated",
    "priceAdjustmentCashBasis": "net",
    "referenceAnchor": "previous-session-official-close",
    "outputDecimals": 8
  },
  "eventRevisions": [
    {
      "revisionId": "R1",
      "securityId": "SYNTHETIC-SECURITY-004",
      "eventId": "SYNTHETIC-SPECIAL-DIVIDEND-2026-01",
      "status": "announced",
      "issuerClassification": "special",
      "grossAmount": 15,
      "currency": "EUR",
      "announcedAt": "2026-02-02T12:00:00Z",
      "availableAt": "2026-02-02T12:05:00Z",
      "exAt": "2026-03-16T13:30:00Z",
      "paymentAt": "2026-03-20T12:00:00Z",
      "actionOrder": 20,
      "amountBasisOrder": 0,
      "sourceId": "SYNTHETIC-ISSUER-NOTICE-R1"
    },
    {
      "revisionId": "R2",
      "securityId": "SYNTHETIC-SECURITY-004",
      "eventId": "SYNTHETIC-SPECIAL-DIVIDEND-2026-01",
      "status": "announced",
      "issuerClassification": "special",
      "grossAmount": 16,
      "currency": "EUR",
      "announcedAt": "2026-02-05T14:00:00Z",
      "availableAt": "2026-02-05T14:10:00Z",
      "exAt": "2026-03-16T13:30:00Z",
      "paymentAt": "2026-03-20T12:00:00Z",
      "actionOrder": 20,
      "amountBasisOrder": 0,
      "sourceId": "SYNTHETIC-ISSUER-NOTICE-R2"
    }
  ],
  "referencePrice": {
    "value": 100,
    "currency": "USD",
    "anchorType": "previous-session-official-close",
    "anchorAt": "2026-03-13T20:00:00Z",
    "observedAt": "2026-03-13T20:00:00Z",
    "availableAt": "2026-03-13T20:00:05Z",
    "sourceId": "SYNTHETIC-OFFICIAL-CLOSE"
  },
  "precedingActions": [
    {
      "actionId": "SYNTHETIC-2-FOR-1-SPLIT",
      "actionOrder": 10,
      "priceFactor": 0.5,
      "perShareAmountFactor": 0.5,
      "effectiveAt": "2026-03-16T13:30:00Z",
      "observedAt": "2026-02-01T10:00:00Z",
      "availableAt": "2026-02-01T10:05:00Z",
      "sourceId": "SYNTHETIC-ACTION-SOURCE"
    }
  ],
  "fxRate": {
    "baseCurrency": "EUR",
    "quoteCurrency": "USD",
    "rate": 1.1,
    "observedAt": "2026-03-13T20:00:00Z",
    "availableAt": "2026-03-13T20:00:05Z",
    "sourceId": "SYNTHETIC-FX-CLOSE"
  },
  "taxProfile": {
    "withholdingRate": 0.25,
    "jurisdiction": "SYNTHETIC-JURISDICTION",
    "investorCategory": "SYNTHETIC-NONRESIDENT",
    "observedAt": "2026-01-05T09:00:00Z",
    "availableAt": "2026-01-05T09:05:00Z",
    "sourceId": "SYNTHETIC-TAX-RULE"
  },
  "exPriceObservation": {
    "value": 43.75,
    "currency": "USD",
    "observedAt": "2026-03-16T20:00:00Z",
    "availableAt": "2026-03-16T20:00:05Z",
    "sourceId": "SYNTHETIC-EX-CLOSE"
  }
}
```

### Call

```ts
calculate(rawData)
```

### Returns

object with 16 fields: eventState, selectedRevisionId, classificationDecision, classificationReason, adjustmentApplied, referencePriceOnEventBasis, grossDividendOnEventBasis, netDividendOnEventBasis, …

```json
{
  "eventState": "effective",
  "selectedRevisionId": "R2",
  "classificationDecision": "special",
  "classificationReason": "source designation: special",
  "adjustmentApplied": true,
  "referencePriceOnEventBasis": 50,
  "grossDividendOnEventBasis": 8.8,
  "netDividendOnEventBasis": 6.6,
  "adjustmentCashAmount": 6.6,
  "theoreticalExPrice": 43.4,
  "adjustmentFactor": 0.868,
  "grossDistributionYield": 0.176,
  "methodologyId": "SYNTHETIC-NET-RETURN-POLICY",
  "methodologyVersion": "1.0"
}
```

Showing 14 of 16 fields.

## Verification and provenance

Tier: **verified** (via input-expected).

The worked example below is the figure published in this algorithm's article, replayed and asserted by the test suite on every build. The arithmetic cannot drift without the build failing.

Both tiers guarantee the signature. Full explanation: https://docs.thefintechbuilder.com/guides/verification/

Generated from the docs.json payload shipped inside fintech-algorithms@0.13.1.
The signature and parameter list are checked against the compiled implementation at build time,
so a description that contradicts the code fails the build rather than reaching this file.

## Links

- Article (how it works, step by step): https://thefintechbuilder.com/corporate-actions-and-security-master-data/complex-distributions/special-dividend-adjustment/
- Implementation source: https://github.com/IslamBaraka90/Fintech-Algorithms-Library/blob/main/src/corporate-actions-and-security-master-data/complex-distributions/special-dividend-adjustment/impl.ts
- Standalone repository: https://github.com/IslamBaraka90/Fintech-Special-Dividend-Adjustment-Corporate-Actions-algorithm
- Package on npm: https://www.npmjs.com/package/fintech-algorithms
- Domain index for agents: https://docs.thefintechbuilder.com/corporate-actions-and-security-master-data/llms.txt