Dividends Paid After the Year End & IAS 10

Lliamcolm14y ago

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
Liam

MikeLittleTutor14y ago#1

No, 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

Lliamcolm14y ago#2

Thanks

MikeLittleTutor14y ago#3

you're welcome

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