Reopening of Financial statements within same year
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 March 2010
Dear All
I have been gone through one bank audit , I have got two balance sheet of the same financial year of an organization having turnover is around Rs.300 Cr.
I have found out that company had made the proposed dividend in first balance sheet finalized in June & another one where the Dividend recommended by Board & accepted by Share Holders are diffrent so Company takes the view and change balance sheet hence profit had been increased by 11 % .
Whether this action is permissible within same year or in subsequent year ?
(Whole process has been carried out by management within the due date of filling of Audit as well as I.T. Return....)
I have been gone through one bank audit , I have got two balance sheet of the same financial year of an organization having turnover is around Rs.300 Cr.
I have found out that company had made the proposed dividend in first balance sheet finalized in June & another one where the Dividend recommended by Board & accepted by Share Holders are diffrent so Company takes the view and change balance sheet hence profit had been increased by 11 % .
Whether this action is permissible within same year or in subsequent year ?
(Whole process has been carried out by management within the due date of filling of Audit as well as I.T. Return....)
04 March 2010
The shareholders can reduce the dividend declared by the Board. Therefore the above action is admissable under law. Generally the dividend will be appropriated in Profit and loss appropiration account, if the company has directly debited to its profit & loss account then they can revise the balance sheet before the due dates.
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