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Proposed dividend

Harsh Modi (student) (39 Points)

07 May 2015

Can proposed divident be treated as adjusting event as per AS-4? Is it required to disclose provision for proposed dividend in revised schedule VI?

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Dheeraj Rinwa (Student) (98 Points)
Replied 07 May 2015

Yes it's an adjusting event as per Para 14 of AS-4. However the Standard is silent regarding the disclosure of proposed divided. But it is disclosed under the head Short term provisions as per the modern practice it is treated as liability whereas some of the scholars believe that it is a part of reserves and surplus instead of showing it as a liability.