Proposed dividend
This query is : Resolved
26 November 2012
Dear Experts,
Can you please explain it`s accounting aspect and also as to how it will be presented in Cash flow ?
Can you please explain it`s accounting aspect and also as to how it will be presented in Cash flow ?
CA Kishore Tallam
(Expert)
26 November 2012
Dividend shall be accounted as Provision even if it is proposed or declared after BS date but before FS are approved.
Entries can be:
P&L A/c Dr
To Provision for Proposed dividend
(Being proposed dividend provided)
Proposed dividend shall be disclosed under "Short-term provisions" since it is generally expected that dividend will be paid immediately.
Since as at 31 March 2012 dividend is not paid, it will not have any impact on cashflow.
Entries can be:
P&L A/c Dr
To Provision for Proposed dividend
(Being proposed dividend provided)
Proposed dividend shall be disclosed under "Short-term provisions" since it is generally expected that dividend will be paid immediately.
Since as at 31 March 2012 dividend is not paid, it will not have any impact on cashflow.
26 November 2012
But in cash flow from Operating activities, whatever is provided is added. What is the meaning of the closing balance in proposed dividend account becomes current year proposed dividend. Is it because it is short term and expected to be paid within a year.
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