JOSEPH DAVID (GM FINANCE) (286 Points)
09 March 2009
CA SUDIPTA SINHA
(Commerce Coaching- Accounts Cost FM)
(735 Points)
Replied 09 March 2009
as it is cumulative preference sahre dividend can be accumulated and paid in the subsequent year......so if divedend is not paid in one year it can be paid in the next year.....and for this the issuing company (X Ltd.)shall make a provision.....and also the other company (Y Ltd) shall record it as dividend receivable in its books....
NO....no provision is made for unpaid preference dividend on Cumulative prefernce Shares...Infact it is disclosed as a contingent liability in Notes on Accounts as per AS-29.
Dividend is recognised as an income when right to receive dividend has been established as per AS-9 and hence it should be reconsided only when dividend is declared.
>>Vipul Garg
CAclubindia
