CA Inter P1 · Chapter 5 · Question 2 of 12
Case: After the balance sheet date but before approval of the financial statements, the board of Chinar Woollens Ltd proposes an equity dividend of ₹2 per share for the year just ended. Under AS 4 (Revised), this dividend should be:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Disclosed in the notes and not recognised as a liability at the balance sheet date
Explanation
Under AS 4 (Revised), dividends proposed or declared after the balance sheet date but before approval of the financial statements are not recognised as a liability at the balance sheet date because no obligation existed then. They are disclosed in the notes.
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