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the dividend paid for irredeemable preference share (cumulative and non-cumulative) is it a finance cost in statement of profit or loss or treat it like a normal dividend paid to ordinary share which will be deducted in retained earnings?
That’s a good question! I keep saying in lectures that I should write to the examiner and ask this very same question! Irredeemable preference shares fit neither into the definition of equity (that element which shares the surplus in a liquidation after all liabilities have been paid in full) nor the definition of a liability (an obligation arising from past events ….)
Fortunately the examiner does not ask this element in the examinations :-)))
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