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Para 13 of As-20

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14 August 2010 cipating preference shares.In such situation,as per para 13 of As-20, the Company must reduce the same from PAT only for the purpose of compliace of As -20. Can you explain the same is compulsory or not to comply para 13 of As-20 for companies or not ? The decision will affect indinan corporate history
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vrnanda

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vrnanda (Expert)
18 August 2010 Hi Snehal,

EPS is the earnings per share per unit of equity holding.

hence, you need to compulsory reduce the PAT by the amount payable as preference dividend (including dividend distribution tax) to arrive at the Profit attributable to equity share holders.

this is of course a compulsory as long as you have the preference share capital irrespective of whether dividend is declared or not for such preference shares.

Para - 13 is stating the dividend declared for cumulative preference shares in respect of the earlier years should not be deducted, as the same has been declared in the respective years as explained above.

hope this clarifies your concern.
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