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Hello,
I am aware that if a company declares a dividend say in Feb 2012 in respect of Year End 31.12.11, then this is not an adjusting event as per IAS 10
My question is if a company declares and pays a dividend in Feb 2012 (which is before the 31.12.2011 accounts are issued), where the dividend paid relates to 2011, is this an adjusting event?
Thanks
LiamNo, because the obligation did not exist as at the year end. So it would be a non-adjusting event requiring only disclosure.
However, think about the practicalities involved. I presume that this is a “final” dividend for the year ended 31 December, 2011. And you’re paying it BEFORE the financial statements are issued ( they may be finalised, and signed off by the directors, but you’re suggesting they have not yet been distributed to the members ), then I must ask “Why?” Surely the practicalities are such that the directors would wait for the AGM before declaring that dividend.
But all that is hypothetical – because the obligation did not exist as at the year end, then no provision would be appropriate
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