DFS - Dividends

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi,

I am slowly going mad trying to understand the treatment of dividends.

I understand, from IAS10, that post balance sheet date dividend proposals are not recognised in the financial statements but rather are noted.

What I cannot understand is the double entry for final dividends proposed before the balance sheet date. What is the double entry? and where do these entries appear in the Income Statement and the Balance Sheets?

Any help will greatly appreciated.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - Dividends

    Hi

    i think the posting of the proposed dividend before the year end is Cr Dividend liabilties (under current liabilities) and Dr retained earnings at the bottom of the balance sheet. You dont put dividens in the invcome statement at all.

    So i beleive anyway.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - Dividends

    DR Retained earning
    CR Dividend Payable

    Dividend are declared but not paid, they are a short term liabilities (expected to be paid within months)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - Dividends

    Thanks jsblackcats. That makes sense, everything falls into place now.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - Dividends

    Likewise, thanks petrolmonkey.

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