Regarding financial statement preparation
This query is : Resolved
08 October 2018
Dear Sir,
Please clarify whether proposed dividend of FY 2017-18 has to be shown in financial statements of FY 2017-18?
Please clarify whether proposed dividend of FY 2017-18 has to be shown in financial statements of FY 2017-18?
08 October 2018
As per the revised Accounting Standard, proposed divided is no longer to be recognised as liability as on Balance Sheet Date.
The same will be accounted when it is approved by the Shareholders in the Annual General Meeting.
20 July 2025
As per the applicable accounting standards and the Companies Act, the treatment of proposed dividend in the financial statements has changed over time.
✅ Current Position (As per Companies Act, 2013 & Ind AS/AS):
Proposed Dividend for FY 2017–18 should not be shown as a liability in the financial statements for FY 2017–18.
🔹 Why?
As per AS 4 (Revised) and Ind AS 10, proposed dividends are events occurring after the reporting period.
Since the dividend is declared after the balance sheet date (usually at the AGM), it should not be recognized as a liability as on 31st March 2018.
📌 How to Show It?
Particular Treatment
Balance Sheet (as of 31.03.2018) ❌ Do not show proposed dividend as a liability
Notes to Accounts ✅ Disclose under “Contingent Liabilities / Events After the Reporting Period”
Directors’ Report ✅ Mention the proposed dividend for shareholder information
📝 Example Disclosure in Notes:
"The Board of Directors has recommended a final dividend of ₹ X per share for the financial year 2017-18. This is subject to the approval of the shareholders at the ensuing Annual General Meeting and hence not recognized as a liability as on 31st March 2018."
✅ Current Position (As per Companies Act, 2013 & Ind AS/AS):
Proposed Dividend for FY 2017–18 should not be shown as a liability in the financial statements for FY 2017–18.
🔹 Why?
As per AS 4 (Revised) and Ind AS 10, proposed dividends are events occurring after the reporting period.
Since the dividend is declared after the balance sheet date (usually at the AGM), it should not be recognized as a liability as on 31st March 2018.
📌 How to Show It?
Particular Treatment
Balance Sheet (as of 31.03.2018) ❌ Do not show proposed dividend as a liability
Notes to Accounts ✅ Disclose under “Contingent Liabilities / Events After the Reporting Period”
Directors’ Report ✅ Mention the proposed dividend for shareholder information
📝 Example Disclosure in Notes:
"The Board of Directors has recommended a final dividend of ₹ X per share for the financial year 2017-18. This is subject to the approval of the shareholders at the ensuing Annual General Meeting and hence not recognized as a liability as on 31st March 2018."
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Deemed Capital Gain
- Type of Capital Gain
- Exiting partner in partnership firm in gst portal
- Loss of interest in PF transfer from EPFO to Trust
- Banking Related Issue
- IT returns for fresh job holders
- Grand in aid
- ASMT-10 received from A O
- Taxability of credit in canara bank ET & T section (NRO)
- Traces submitting correction statement error
- Account freezed for Ineligible ITC Scrutiny for GST Annual Return
- TDS on property - Form 141 query
- Seeking Advice: High Tax Shortfall on Job Switch + Let-Out House Property Loss in FY 2025-26
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
