Dividend
This query is : Resolved
02 June 2009
why depreciation is made compulsory for paying dividend.what is the logic behind it?
Thanking Advance
Sudhansu
Thanking Advance
Sudhansu
Deepak Agrawal
(Expert)
02 June 2009
Depreciation is an wear & tear expenses provided by the company for the use of fixed assets.
Depreciation is a non cash expenses. Dividend is the income for shareholders. So while calculating, depreciation, being an expense is to be provided to get actual profit.
Depreciation is a non cash expenses. Dividend is the income for shareholders. So while calculating, depreciation, being an expense is to be provided to get actual profit.
Ankur Garg
(Expert)
03 June 2009
Agree with Deepak.
Dividend is nothing but a part of profit earned by the company. As per matching concept charging dep as an exps before determining profit is necessary.
Dividend is nothing but a part of profit earned by the company. As per matching concept charging dep as an exps before determining profit is necessary.
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