Dear Sir,
Referring to para 4.3.4 of the guidance note on revised schedule VI to the Companies Act, it states that proposed dividend declared by a subsidiary company after the date of balance sheet should no longer be included in the said balance sheet as an adjusting event. As per AS 9, dividend should be recognised only when the right to receive dividend is established as on the balance sheet date. My question to you is that doesn't this provision clash with the provisions of para 8.5 of AS 4 which states that proposed dividend, even though declared after the date of the balance sheet, should be treated as an adjusting event and should reflect in the balance sheet. The guidance note in para 4.1.1 clearly specifies that in case of incongruence between the guidance note and any accounting standards, the requirement of the accounting standard shall prevail.
In the light of above provisions, kindly clarify me the correct accounting treatment.
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Clash between revised schedule vi and as 4
I think Accounting Standard 4 should Prevail.
no proposed divident cant be shown in b/s
i think there is notofication, i am not remebering exactly.... but i read somewhere k AS 4 will prevail.. wait for expert's comment
Under revised schedule VI proposed divided is required to be disclosed in notes on accounts only.
https://www.mca.gov.in/Ministry/pdf/Schedule_VI_28feb2011.pdf
just go to above link read general instruction no.1 u r doubt will be clear
Sequence of Applicability
1. AS will be given 1st preferance
2. Companies Act if AS is silent
3. Schedule VI if Companies Act is silent
LET ME MAKE IT EASY FOR YOU.....THE LAST POST WAS RI8.
IN ADDITION TO ABOVE.....YOU MAY GO FOR SURBHI BANSAL'S LATEST EDITION WHERE IT HAS BEEN CLARIFIED THAT IN AND ACCORDING TO SCHEDULE VI (NOT REVISED SCHEDULE VI) PROPOSED DIVIDEND=CURRENT LIABILITY THOUGH IT WAS NOT IN EXISTENCE ON THE BALANCE SHEET DATE.
I HOPE I WAS ABLE TO HELP YOU.
Ya if there is a conflict between Accounting Standards and Revised schedule then accounting standards prevail.......as it is already clarified that :-
1- Give preference for AS
2. If AS is silent then Companies Act.
3. If companies Act And AS is silent then Revised Schedule VI.
Thank you all for your responses
Hello Friends,
I think i will help u,
As per revised schedule vi, P.D will not be disclose under balancesheet. Which is differ from AS-4....For solving down this problem icai are taking steps ...for it icai is changing as-4 and for it icai is already created exposure draft for AS-4 limited revison..I hereby attaching herewith exposure draft...Due to this...its clear that icai intention is to convert AS-4 par with Revised Schedule-6. So its clear that proposed dividend will not be mentioned under Balance sheet.
https://220.227.161.86/28045expasb290912a.pdf
Thanks,
Hello Friends,
I think i will help u,
As per revised schedule vi, P.D will not be disclose under balancesheet. Which is differ from AS-4....For solving down this problem icai are taking steps ...for it icai is changing as-4 and for it icai is already created exposure draft for AS-4 limited revison..I hereby attaching herewith exposure draft...Due to this...its clear that icai intention is to convert AS-4 par with Revised Schedule-6. So its clear that proposed dividend will not be mentioned under Balance sheet.
https://220.227.161.86/28045expasb290912a.pdf
Thanks,
yes AS-4 come in to picture in this case. AS will prevail over schedule-vi
AS 4 says about the declaration dividend by a company but revised schedule says about the dividend received from the subsidiary then y there is a conflict.
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