08 August 2010
One of Company has issued cumulative participative preference shares.The Company has not declared or provided preference share dividend on shares during the financial year 2009-10. As per Companies Act, 1956 dividend accrue,even though not declared or porvided in books of account for F.Y 09-10. As per para 13 of As-20 the current year's dividend on shares should be reduced from PAT for calcualatine basic E.P.S eventhough not declaed or provided in books. This affects indian corporate world substantially. Please explain.
08 August 2010
Compliance of 211 (3C) of the Companies Act,1956 is mandatory for corporates. As a part of it , they have to follow AS-20 for calculating EPS. The EPS so calculated, will be displayed in the face of the profit and loss account as well as the workings will be included in the notes forming part of the accounts. Thus the requirement becomes transparent as far as all the users of the financial statements are concerned. If the issue is viewed as above, I don't think that the method as well as the disclosure will substantially affect the corporates in general.
14 August 2010
Mr B chckrapani, The Company has right to not declare or provide preference share dividend on cumulative participating preference shares.In such situation,as per para 13 of As-20, the Company must reduce the same from PAT only for the purpose of compliace of As -20.In such situtation, the decision will affect indian corporate world to the extent of great way. I expect your urgent reply
CAclubindia
