What will be the treatment of UNCLAIMED DIVIDEND(equity) of current ye...
Treatment of Unclaimed Dividend in the Current Year
When there is no balance of unclaimed dividend from the previous year, the treatment of unclaimed dividend in the current year will depend on the company's policies and legal requirements. Generally, unclaimed dividends are treated as a liability on the company's balance sheet until they are claimed by the shareholders.
Adjustment of Interim Dividend in Cash Flow Statement
Interim dividend is a dividend paid by a company to its shareholders before the end of its financial year. The adjustment of interim dividend in the cash flow statement will depend on whether the dividend has been paid or declared. If the interim dividend has been paid, it will be deducted from the company's cash flow from operating activities. If the interim dividend has been declared but not paid, it will be added back to the company's net income in the cash flow statement.
Possible Scenarios
Here are some possible scenarios that can help illustrate the treatment of unclaimed dividend and interim dividend adjustment:
Scenario 1:
- No balance of unclaimed dividend from the previous year
- Interim dividend of 1 lac declared and paid
- No final dividend declared
Treatment:
- Unclaimed dividend is not a liability
- Interim dividend of 1 lac is deducted from operating activities in the cash flow statement
Scenario 2:
- No balance of unclaimed dividend from the previous year
- Interim dividend of 1 lac declared but not paid
- No final dividend declared
Treatment:
- Unclaimed dividend is not a liability
- Interim dividend of 1 lac is added back to net income in the cash flow statement
Scenario 3:
- Balance of unclaimed dividend from the previous year: 50,000
- Interim dividend of 1 lac declared and paid
- No final dividend declared
Treatment:
- Unclaimed dividend of 50,000 is a liability
- Interim dividend of 1 lac is deducted from operating activities in the cash flow statement
Conclusion
The treatment of unclaimed dividend and interim dividend adjustment in the cash flow statement will depend on the company's policies, legal requirements, and the specific circumstances of each case. It is important to follow the generally accepted accounting principles and to disclose all relevant information in the financial statements to ensure transparency and accuracy.
What will be the treatment of UNCLAIMED DIVIDEND(equity) of current ye...
In financing activity deduct only the amount of dividend paid that is interim minus unclaimed
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