accounting query

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

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!

It should be treated as Expense.

i think u r right

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

why????????

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