sriram tata (student ) (24 Points)
03 September 2012As per Revised Schedule VI, proposed dividend is a non-adjusting event, i.e it has to be disclosed merely in the notes to accounts. But as per AS-4, it happens to be an adjusting event. So, how to comply with both of them as an auditor? Please help me out with which way to take and how to arrive at a harmonious compliance?
If possible, please support your answers with proper case laws and provisions (if any).
* Krishna *
(CA Student)
(6149 Points)
Replied 03 September 2012
As per Revised Schedule VI, proposed dividend has no specific need to be shown under the head provisions, instead a disclosure is required separately as a note. However, as per AS-4, proposed dividend needs adjustment, if proposed or declared after B/s date but before the approval of FS. As it was mentioned in the general instructions of RS VI, requirements of AS will prevail over RS VI. Hence, proposed dividends will have to be provided as per AS-4. You may view it in one angle as proposed dividend is not representing the present obligation in b/s. Hope this helps.
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