Dear Sir,

Referring to para 4.3.4 of the guidance note on revised schedule VI to the Companies Act, it states that proposed dividend declared by a subsidiary company after the date of balance sheet should no longer be included in the said balance sheet as an adjusting event.  As per AS 9, dividend should be recognised only when the right to receive dividend is established as on the balance sheet date.  My question to you is that doesn't this provision clash with the provisions of para 8.5 of AS 4 which states that proposed dividend, even though declared after the date of the balance sheet, should be treated as an adjusting event and should reflect in the balance sheet. The guidance note in para 4.1.1 clearly specifies that in case of incongruence between the guidance note and any accounting standards, the requirement of the accounting standard shall prevail.

In the light of above provisions, kindly clarify me the correct accounting treatment.