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Dear Sir,
Let say,
A listed company, XYZ declared a dividend payment of $1.00 per share during the Annual General Meeting on 30 Apr 2015. Financial year ended 31 Dec 2014.
If this dividend is to be payable to shareholders on 29 May 2015, what is the accounting treatment?Given number of ordinary shares eg 700,000 shares
Profit after tax $15 millionShould i accrue the dividend payable in Apr 2015 or May 2015?
Thanks you.
Neither! Why accrue it? When due date of payment comes along simply:
Dr Dividend Account
Cr CashI suppose you could, if you really wanted, accrue it in a Dividend Account but I don’t see the point
If you want to go down that line then, strictly speaking, the obligation is created in April by the approval of the shareholders’ vote at the Annual General Meeting so:
Dr Dividend Account
Cr Accruals AccountAnd then in May, when it’s paid:
Dr Accruals Account
Cr CashOk?
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