Dividends Received

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fatandforty
fatandforty Registered Posts: 553 Epic contributor 🐘
Please can someone tell me do you put dividends received under non-current assets on the statement of financial balance (balance sheet!!)

Thank you

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  • meibaker
    meibaker Registered Posts: 481 Dedicated contributor 🦉
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    hi, dividend recieved should be add under finance costs in income statement!
  • fatandforty
    fatandforty Registered Posts: 553 Epic contributor 🐘
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    Thanks but even though it's an income and not a cost??
  • crispy
    crispy Registered Posts: 466 Dedicated contributor 🦉
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    Hello,

    I would show dividends received as 'Investment Income' on the income statement before the finace costs.
  • fatandforty
    fatandforty Registered Posts: 553 Epic contributor 🐘
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    Thanks, does it go anywhere on the statement of financial balance aswell though?
  • crispy
    crispy Registered Posts: 466 Dedicated contributor 🦉
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    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
    fatandforty Registered Posts: 553 Epic contributor 🐘
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    Thank you :-)
  • crispy
    crispy Registered Posts: 466 Dedicated contributor 🦉
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    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.
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