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anamika vardhan

anamika vardhan

CA Inter

880

26-Aug-20 18:18

18

Accounting standard-4

How proposed dividend should be disclosed ?

Answers (1)

Madhuri Veluri

Madhuri Veluri

Moderator

27-Aug-20 06:18

As per the Ministry of Corporate Affairs Notification dated 6th April 2016, regarding Amended Schedule III to Companies Act 2013, in lieu of amendment in AS 4 by ICAI, the treatment of Proposed dividend in the Balance Sheet of a company prepared as per Schedule III of the Companies Act shall be a Contingency - Events Occurring after the Balance Sheet Date. As per the amendment made in Accounting Standard 4, dividend proposed for a year is not a liability till it has been approved by the shareholders. Thus, proposed dividend is not shown as a short-term provision in the current Balance Sheet of a company but disclosed in Notes to Accounts. under Contingent Liabilities.