accounting query

Page no : 2

Rahul Gupta (CA Final Student) (1780 Points)
Replied 18 September 2009

Hi Ankur.

When Company proposes dividend then it has to be approved by the shareholders. Now A shareholder can never increase the percentage but might reduce it in Bad situations. So Only aftr the approval income can be recognised.

Hence according to me it would be done at the time of declaring the dividend.

Correct me if i am wrong.

Regards

Rahul Gupta

Kaustuv (Practicing CA) (1773 Points)
Replied 19 September 2009

Rahul you are absolutely correct. We recognise income from dividend when the right to receive the dividend is established. This is only when the shareholders approve the dividend in an AGM in case of final dividend. And remember you can't recognise any gain unless realised!

CA. SUDHARSAN K G (Chartered Accountant) (472 Points)
Replied 19 September 2009

It should be treated as Expense.

Ankur bansal (a) (135 Points)
Replied 19 September 2009

Originally posted by :Rahul Gupta
"	Hi Ankur. When Company proposes dividend then it has to be approved by the shareholders. Now A shareholder can never increase the percentage but might reduce it in Bad situations. So Only aftr the approval income can be recognised. Hence according to me it would be done at the time of declaring the dividend. Correct me if i am wrong. Regards Rahul Gupta	"

i think u r right

bt tel me wen subsidiary co proposes dividend then holding co recognise it.

why????????

(Guest)

As per Schedule VI of the companies act all the assets of value less than Rs. 1000 should be written off..in case of subsidiary companies the rule is same when shareholders approves...subsidiary need not be misunderstud as company under same management (mind That). it can be one of the mode but not the only mode

(Guest)

Originally posted by :Mohan Dagha
"	As per Schedule VI of the companies act all the assets of value less than Rs. 1000 should be written off..in case of subsidiary companies the rule is same when shareholders approves...subsidiary need not be misunderstud as company under same management (mind That). it can be one of the mode but not the only mode	"

The schedule sud be XIV and amount should be Rs. 5,000