Dividends Received

fatandforty

Please can someone tell me do you put dividends received under non-current assets on the statement of financial balance (balance sheet!!)

Thank you

meibaker

hi, dividend recieved should be add under finance costs in income statement!

fatandforty

Thanks but even though it's an income and not a cost??

crispy

Hello,

I would show dividends received as 'Investment Income' on the income statement before the finace costs.

fatandforty

Thanks, does it go anywhere on the statement of financial balance aswell though?

crispy

If you have recieved the dividend in cash:

Dr Bank (Balance Sheet)
Cr Dividends Received (Income Statement)

If Not:

Dr Divdends Receivable (Balance Sheet)
Dr Dividends Received (Income Statement)

fatandforty

Thank you :-)

crispy

Hi,

Sorry if this seems confusing but a further point is you may need to be careful in dealing with dividends received if you are producing consolidated accounts (ie. not single company).

For example if Company A owned 100% of Company B, and B have delclared a dividend this would show as income in comapny A's single company accounts. However when you produce consolidated accounts you need to report from the 'group' perspective. The dividend paid by B would contra against the amount received by A on the consolidated accounts, and only amount paid/received from outside the group should be reported.

This may not be so well explained and can't remember if has ever come up in a previous AAT exam, hope you understand.