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Mayur Khetshi Nisar (Practice)     09 June 2011

Dividend on Shares newly issued

Dear Friends,

If new shares are issued after 31st March 2011, but before the record date, they are entitled to dividend declared in AGM.

However, since they were not existent on 31st March 2011, will provision of dividend on the same tantamount to non following of AS 4 - Events occuring after balance sheet date. 

It says that events occuring after Balance Sheet Date (in our case new shares) should not impact the Accounts (declaring of dividend).

Please guide.



 2 Replies


Shruthi (PCC Student)     17 June 2011

Adjusting Events - gives additional evidence for the condition existing on the balance sheet

Non Adjusting events - its an indicative of condition after the balance sheet

The said case i.e., issue of new shares must be purely grouped under INDICATIVE OF CONDITION i.e., a fresh incidence occuring which is not related to any asset or liability which existed on the B/S date and therefore it is purely NON ADJUSTING EVENT.

Rajnikant Vadigoppula

Rajnikant Vadigoppula (CA, CS And CMA Final)     17 June 2011

as per IND AS 4 it is non adjustable event

and as per old schedule VI of companies act it is adjustable event and should prevail.

but as per new schedule VI of companies act it is non-adjustable event.

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