Vinay Garg (Service Tax Expert) (780 Points)
01 October 2012Please let me know the Applicability and Treatment under AS-4 (Contingencies and Events occuring after the Balance Sheet Date) on Dividend proposed after approval of Financial Statements by competent authority.
CA Manish
(Job)
(5264 Points)
Replied 01 October 2012
Text of AS 4
8. Events Occurring after the Balance Sheet Date
8.1 Events which occur between the balance sheet date and the date on
which the financial statements are approved, may indicate the need for
adjustments to assets and liabilities as at the balance sheet date ormay require
disclosure.
8.2 Adjustments to assets and liabilities are required for events occurring
after the balance sheet date that provide additional information materially
affecting the determination of the amounts relating to conditions existing at
the balance sheet date. For example, an adjustment may be made for a loss
on a trade receivable account which is confirmed by the insolvency of a
customer which occurs after the balance sheet date.
8.3 Adjustments to assets and liabilities are not appropriate for events
occurring after the balance sheet date, if such events do not relate to
conditions existing at the balance sheet date. An example is the decline in
market value of investments between the balance sheet date and the date on
which the financial statements are approved.Ordinary fluctuations inmarket
values do not normally relate to the condition of the investments at the
balance sheet date, but reflect circumstances which have occurred in the
following period.
8.4 Events occurring after the balance sheet date which do not affect the
figures stated in the financial statements would not normally require
disclosure in the financial statements although they may be of such
significance that theymay require a disclosure in the report of the approving
authority to enable users of financial statements to make proper evaluations
and decisions.
8.5 There are events which, although they take place after the balance
sheet date, are sometimes reflected in the financial statements because of
statutory requirements or because of their special nature. Such items include
the amount of dividend proposed or declared by the enterprise after the
balance sheet date in respect of the period covered by the financial statements.
8.6 Events occurring after the balance sheet date may indicate that the
enterprise ceases to be a going concern. A deterioration in operating results
and financial position, or unusual changes affecting the existence or
substratum of the enterprise after the balance sheet date (e.g., destruction of
a major production plant by a fire after the balance sheet date) may indicate
a need to consider whether it is proper to use the fundamental accounting
assumption of going concern in the preparation of the financial statements.
Vinay Garg
(Service Tax Expert)
(780 Points)
Replied 01 October 2012
It does not solved my question..
:(
CAclubindia
