As per AS 4, Proposed Dividend should be accounted as liability only when after it has been approved by shareholders in General Meeting which is held after closure of accounting year.
Thus, accordingly it will be treated as follows:
Proposed Dividend of previous year should be added to determine Net Profit before Tax and same amount should deducted under Cash Flow from Financing Activity.
Is this treatment correct or incorrect, pl clarify b'coz earlier we were adding current years proposed dividend to net profit and previous years proposed dividend was treated as an outflow of cash from financing activity .
Thanks
Regards
Menu
preparation of cash flow statement
Replies (1)
As per new amendment in 2016 proposed dividend is shown as contingent liability so it is not to be added in net profit anymore.
In case it is an before that than we add proposed dividend in net profit and deduct dividend paid from financing activity.
Recent Topics :
- Gst input credit
- CAN PARTNERSHIP FIRM SIGN SERVICE AGGREMENT WITH A
- E-waybill
- Sell of CAFC books
- ITC ON RENT
- GSTR-9 Table 8A Portal and Excel Issues
- IGST on Commercial Rental Income (Different State)
- Revocation of suo moto cancelled GST registration
- Is there any faculty taking chapterwise test in CA
- Late Fees and Interest
Related Topics :
CAclubindia
