Accounting for dividend in revised schedule vi

C.A. LINESH PATIL (CA) (910 Points)

04 August 2012  


1)As per Old Schedule VI Provision for Dividend should be provided in a year to which dividends relates.
2) As per the definition of AS-4 of Adjusting events, dividend is a non-adjusting event but earlier Schedule VI used to override Accounting standards therefore to avoid contrary provision in AS-4,Proposed dividend is treated as a exception to Adjusting event.
3) But Now Revised Schedule VI Does not required to make provision for dividend in a year to which dividend relates only disclosure in Notes to Accounts is required.same treatment is followed in IFRS & Indian AS.
4) Because existing AS-4 has not been revised till & Now A.S. override Revised schedule VI therefore to comply with the Accounting standard 4 Companies are required to create provision for dividend in a year to which dividend relates.
Therefore till the time revision in AS-4 is made provision for Dividend is required.
Revision in AS-4 is pending By ASB.
Thanks & I hope you got your answer.