Ltd Co. Accounts

BenElliott

I am preparing a new set of Ltd. company accounts and am not quite sure how I need to treat interim dividends now with the advent of FRS25.

These dividends have been paid before the balance sheet date, so do they need to go into equity dividends paid or into reserve movements? If the latter, then how and when do I clear them?

Look forward to hearing your thoughts.

Ben

peugeot

FRS 25 removed the requirement to show dividends on the face of the profit and loss account, they are instead a reconciling item under the reserves note.

Your profit and loss account will stop at profit after tax. In the notes to the financial statements, you will have a 'Reserves' note under which Dividends will appear as illustrated:

.....................................Share capital...........Retained earnings........Total
Opening balance..................100..........................10,000...............10,100
Profit for the year.................................................1,000................1,000
Dividends.............................................................(500)................(500)
Closing balance....................100.........................10,500...............11,600

If you're not using accounts production software, make sure that your closing balance on each class of equity does in fact agree.

Kind regards
Steve

BenElliott

Thanks Steve that has been a great help.:thumbup1: