LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Dividend Treatment in Holding & Subsidiary Co

sachin v (abc) (82 Points)

25 July 2008

how to treat dividend recd from subsidiary co but not mentioned from cap profit or rev profit ?

Reply
Follow
Share

4 Replies

S.Srinivasaraghavan (Chief Financial Officer and Co) (11318 Points)
Replied 25 July 2008

Your question is not clear. How can the dividend be classified like capital profit or revenue profit?

sachin v (abc) (82 Points)
Replied 25 July 2008

Sir,

How to treat Interim Dividend, Proposed Dividend and Devidend Paid by Subsidiary Co. to Holding Co.

asi malaviya (article) (22 Points)
Replied 06 December 2012

in holding & subsidiary, dividend proposed before date of acquisition & paid after acquisition in that case why the such amount which is received is credited to investment a/c?

how can we byfercate in revenue profit or capital profit?

what is the treatment in case this amount wrongly credited to profit and loss a/c?

Nithin Chettoor (Assistant Manager) (388 Points)
Replied 06 December 2012

Dividend out of reserves and profits pertaining to the preacquisiton period is treated as capital profit and this will be deducted from the cost of investments. Any other dividend subsequently received will be revenue profits and this will be taken as an income in the holding companys stand alone financials and while consoidating, the same will be eliminated against the dividend paid by the subsidiary. In case it is proposed dividend in subsidiary, this will form part of the Holding companys share in the net results of the subsidiary. And no elimination is done.