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What will be the treatment of UNCLAIMED DIVIDEND(equity) of current year when there is no balance inprevious year also we have intrim dividend of 1lac in adjustment in CASH FLOW STATEMENT?
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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.
Community Answer
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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What will be the treatment of UNCLAIMED DIVIDEND(equity) of current year when there is no balance inprevious year also we have intrim dividend of 1lac in adjustment in CASH FLOW STATEMENT?
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What will be the treatment of UNCLAIMED DIVIDEND(equity) of current year when there is no balance inprevious year also we have intrim dividend of 1lac in adjustment in CASH FLOW STATEMENT? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What will be the treatment of UNCLAIMED DIVIDEND(equity) of current year when there is no balance inprevious year also we have intrim dividend of 1lac in adjustment in CASH FLOW STATEMENT? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What will be the treatment of UNCLAIMED DIVIDEND(equity) of current year when there is no balance inprevious year also we have intrim dividend of 1lac in adjustment in CASH FLOW STATEMENT?.
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