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Hello im looking at the bpp text at the very start of chapter 5 (provisions) pg 140 which deals with ias 10. It mentions that proposed dividends should not be recognised as a liability at the end of the reporting period however from my research i found that the entry was contradicting to what bpp is saying. Please clarify.
Hi,
Good to see that you’re still working hard!
I’m not sure what the text books say but we never recognise a proposed dividend, it will only ever get disclosed in the financial statements. It is not recognised until it is declared as that is when the obligation to pay arises and it therefore meets the definition of a liability. So just be careful that you distinguish between proposed and declared.
Thanks
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