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Sir, do only preference dividends appear in the SOPL? What about ordinary dividends?
Only dividends on redeemable preference shares appear in the SOPL.
Dividends on ordinary shares and dividends on irredeemable preference shares to do not appear in the SOPL. They appear on the SOCE as reducing retained earnings.
Please watch my free lectures on this.
Thank you sir.
How do we know if the preference shares are redeemable or irredeemable if not mentioned? Because in one question they added dividends to Finance cost, i assumed it was irredeemable preference shares and didnt add it.
What about proposed dividends sir? Do we consider them as current liabilities?
If it is not mentioned whether they are redeemable or irredeemable, then you assume that they are irredeemable. (But if they are shown in the SOFP in the question with a year along side, then this means they are redeemable in that year).
With regard to proposed dividends – they do not appear anywhere in the statements. Dividends only appear when actually paid (or when the dividend becomes certain because they have been voted on – not simply proposed).
(Again, I do explain this in my lectures)
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