one of my client has last audited bal sheet as at 30/6/1986.after that no records.they want to close co.what should be treatment for Dividend on cumulative pref shares.what if the co. is in loss?
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Preference Dividend
Replies (5)
Normally cumulative pref shares are entitled to dividend every year whether company has profit or loss.
In case of loss, just make provision for cumulative dividend and at time of dividend they will be paid all outstanding divided till that date
Since long back I think the amount of unpaid dividend should have been transferred by the Company to the IEPF a/c.
However let us wait for the views of the experts.
Regards
Priya
As there is no profit no need to pay Pref. dividend, definetely being cumulative pref. shares you will have to make provision for that while preparing financial statement. you follow the instruction of EES, 2010 and go for that.
Others views solicited
Regards
I would like to add to the reply posted by Mr. Vivek.
You can follow EES scheme 2010 only when the status of the Company is shown as Active under the Company Master data.
Else I agree with Mr. Vivek.
Regards
Agree with Priya
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