ACCA FA · Chapter 11 · Question 6 of 12
After the reporting date but before the financial statements are authorised for issue, the directors declare an ordinary dividend. How should this be treated?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) It is not recognised as a liability but is disclosed in the notes
Explanation
IAS 10 states that dividends declared after the reporting period are not a liability at the reporting date, because no obligation existed then. They are disclosed in the notes to the financial statements and are recognised in the period in which they are declared.
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