09 September 2017
[1] According to the latest MCA amendment w.e.f. 30 March 2016 by MCA in AS 4, proposed dividend is not to be recognised as liability in the books of account; but is to be shown only by way of a note to the accounts since the statutory obligation for dividends arises only after approval by the shareholders. [2] ICAI suggested answers [CA Inter May 2017 Q. 1(d)] also confirm this treatment. [3] Most of the published Financial Reports of listed companies for year ending 31 March 2017 have also shown proposed dividend only by way of note and not as an appropriation / current liability. [4] However, in all the Illustrations in the latest study material (July 2017) for CA Inter Paper 1 Accounting Module 23 Chapter 4 - Financial Statements of Companies-; and CA Final Financial Reporting RTP for Nov 2017 Q 1, proposed dividend is shown in the body of the balance sheet (by deduction as appropriation from Reserves and surplus; and as current liability) and not in the notes.
09 September 2017
now it is not an adjusting event show in notes to accounts please follow this as this is a new amendment and please follow to make it clear in exams put a note and say problem is attempted based on this
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