Ch 4 preparation of FS
Could u explain which AS is that....since in video, Sir includes the final dividend ...but in book they doesn't...so kindly explain the logic behind that
The relevant AS here is AS-4 which is covered by ICAI in Group 2: Advanced Accounting. The relevant portion is: If dividends are declared after the balance sheet date but before the financial statements are approved, the dividends are not recognised as a liability at the balance sheet date because no obligation exists at that time unless a statute requires otherwise. Such dividends are disclosed in the notes. Thus, no liability for proposed dividends needs to be recognised in financial statements for financial year. Can you please mention in which video / illustration is this included in IndigoLearn's video? Thanks.
2.preparation of FS in that video no:12&13
Thank you. In video 12, 13 date of dividend declaration was not mentioned hence it was shown in the financial statements. In the ICAI's illustration you shared above, date of declaration is specifically mentioned to be 2nd April, 20X2. Hence as per AS-4, it will only be disclosed in notes.
kindly do check video no 14 (illu -2) in that also we have final dividend
Yes, thanks. So, it's same: In that illustration again, date of dividend was not mentioned hence shown in Balance sheet. If date of declaration mentioned was after the close of financial year, we would not show. It will be disclosed in notes only.