Practicing Success
When proposed dividend becomes a liability for the company? |
Approved by directors Approved by shareholders Either option 1 or 2 Both |
Approved by shareholders |
After the Proposed dividend is declared by the shareholders, it becomes a liability for the company and is accounted in the books. As a consequence, proposed dividend of previous year will be declared (approved) by the shareholders in the current year and this declared (approved) proposed dividend will be accounted during the year. Proposed dividend for the current year will be relevant for the next financial year. |