Dfs dec 06

Tina Sparkles
Tina Sparkles Registered Posts: 17 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Hi everyone

Just trying to get last min revision done. On the journals that we are required to do it says that a dividend is propossed, why is an adjustement not done for this as a journal? Also the asset at re-valued why is this not accounted for in the p&l? The adjustment is only seen in the bs why??

Thanks

Comments

  • lala2009
    lala2009 Registered Posts: 95 Regular contributor ⭐
    The dividend is only PROPOSED therefore it may not definitely be that amount. (Not shouting, just emphasising the word proposed hehehe :))

    Revaluation doesnt affect the income statement as there is no actual money going in/out. Therefore the PP&E is debited the reflect the cost and the Revalation Reserve is credited in the Equity section of the balance sheet. Hope this makes sense :)
  • CathG
    CathG Registered Posts: 145 Dedicated contributor 🦉
    Dividends don't become liabilities until they're paid out, so when they've only been proposed you don't need to account for them.

    A revaluation of an asset would be shown as Dr Asset Cr. Revaluation Reserve, so it appears at the top of the balance sheet as the revsied figure for the asset and at the bottom in the equity - I think (?) It doesn't go into the income statement as assets aren't mentioned there.

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