dec 2006 DFS

System
System Posts: 100,534 πŸ€– Admin πŸ€–
edited June 18 in AAT student discussion
It says draft an income statement, but it also says that they directors have proposed a dividend or 7p but i was just wondering if you have to include this in the income statement or in the bal sheet ?

Comments

  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    I passed DFS in December. Think you ignore the dividend as it's proposed. have a look at IAS 10.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    thanks mate i wish i had the question to refer to !!
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    certain you ignore proposed dividends (old standards used to include them somewhere)
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    so when did the stds change
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    No idea when the standards changed but as we're now assessed on the new standards it's irrelevent. Thinking back to the exam the first task was to prepare a journal if I recall.

    Have you done a journal for the dividend? You shouldn't. IAS 10 refers as it's after the balance sheet date.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    http://img77.imageshack.us/my.php?image=untitledtn0.jpg

    ok here is the question
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    how do you know its after the bal sheet date ?
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    Only the dividends paid during the year can be recorded in the finacial statements (IAS10).

    To take it to the next stage I think you are supposed to do a note to the accounts but i don't think that's assessable under AAT
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    yeah but they have proposed a divdend, surely at the least its an accural
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    As I remember it, I thought the proposed dividend was illustrated in a note to the accounts.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    A dividend is an amount paid from the retained profits for the investors imput. But its not a definate. say the proposed divided, mid-year was going to be £1 and there were a 1000 shares and only £100 left in the retained earnings at the end of the year. If the dividend was proposed on a mid-year decision and things didnt go so well, then they'd have to change their minds on what amount they were going to pay to the shareholders, right?
    The proposed bit means 'intended.' It doesnt mean definately incurred.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    Trust me it is not an accrual. Sorry, studying BTC for tomorrow at the mo, but i did pass DFS in December. The dividend is ignored under IAS 10.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    ahh i see so the word propsosed is the key word here, oh i totally agree its not an accural but i coudnt think where else to put it. But they do account for it in the bal sheet

    http://img267.imageshack.us/my.php?image=untitled2el1.jpg here is the answer

    http://217.68.69.153/other_files/DFS-questions.pdf

    http://217.68.69.153/other_files/DFS-modelanswers.pdf

  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    Not looked but i don't think they do. They will have accounted for the 2005 final and the 2006 interim but not the 2006 final.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    IAS 10: Events after the balance sheet date

    "Dividends declared or proposed after the balance sheet date are not to be recognised as liabilities on the balance sheet. Instead they are non-adjusting events which are disclosed by way of a note"

    Only dividends actually paid in the year appear in the accounts where they are deducted from retained earnings.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    yeah but they have put them in the balance sheet and not the income statement ? all the other journal entries are
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    No offence mate but i hope IAS 10 / dividends aren't assessed this time.

    Good luck.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    oh no i can handle it, its just i think i learned theold stds !!! which is very shizer !
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:dec 2006 DFS

    I'm pretty sure the dividend thing is 2 years old - I think also that it is the same for UK and international standards.

    Is there any possibility that you are looking at an old exam paper?

    Annette

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