As-4 for proposed dividend after approval

AS 949 views 2 replies

Please let me know the Applicability and Treatment under AS-4 (Contingencies and Events occuring after the Balance Sheet Date) on Dividend proposed after approval of Financial Statements by competent authority.

Replies (2)

Text of AS 4

 

8. Events Occurring after the Balance Sheet Date

8.1 Events which occur between the balance sheet date and the date on

which the financial statements are approved, may indicate the need for

adjustments to assets and liabilities as at the balance sheet date ormay require

disclosure.

 

8.2 Adjustments to assets and liabilities are required for events occurring

after the balance sheet date that provide additional information materially

affecting the determination of the amounts relating to conditions existing at

the balance sheet date. For example, an adjustment may be made for a loss

on a trade receivable account which is confirmed by the insolvency of a

customer which occurs after the balance sheet date.

8.3 Adjustments to assets and liabilities are not appropriate for events

occurring after the balance sheet date, if such events do not relate to

conditions existing at the balance sheet date. An example is the decline in

market value of investments between the balance sheet date and the date on

which the financial statements are approved.Ordinary fluctuations inmarket

values do not normally relate to the condition of the investments at the

balance sheet date, but reflect circumstances which have occurred in the

following period.

8.4 Events occurring after the balance sheet date which do not affect the

figures stated in the financial statements would not normally require

disclosure in the financial statements although they may be of such

significance that theymay require a disclosure in the report of the approving

authority to enable users of financial statements to make proper evaluations

and decisions.

8.5 There are events which, although they take place after the balance

sheet date, are sometimes reflected in the financial statements because of

statutory requirements or because of their special nature. Such items include

the amount of dividend proposed or declared by the enterprise after the

balance sheet date in respect of the period covered by the financial statements.

8.6 Events occurring after the balance sheet date may indicate that the

enterprise ceases to be a going concern. A deterioration in operating results

and financial position, or unusual changes affecting the existence or

substratum of the enterprise after the balance sheet date (e.g., destruction of

a major production plant by a fire after the balance sheet date) may indicate

a need to consider whether it is proper to use the fundamental accounting

assumption of going concern in the preparation of the financial statements.

It does not solved my question..

:(


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