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John Moffat.
John Moffat.-
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yusra97
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sir i would like to ask separate reserve within equity in a company statement of financial postion..
Okay i understood retained earnings , revaluation surplus is there but is funds to replace non currents assets there too? i never saw it..in the equity section in sofp2nd doubt is In investing activity dividend received is there and dividends paid is in operating and financing?
John Moffat
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A company can have whatever extra reserves it wants. If they choose to set aside part of their retained earnings and call them a reserve for replacement of assets, then they can do. It is not a legal requirement, but they might do it just to make sure they do not distribute all the earnings as dividend.
In the statement of cash flows, dividends received are shown under the heading ‘cash flows from investing activities’. Dividends paid can be shown either under ‘cash flows from operating activities’ or ‘cash flows from financing activities’ – I explain this in my free lectures.
yusra97
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