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DIVIDEND RECOGNISATION:

A Ltd invested in equity shares of the B Ltd. B Ltd declared dividend on30.11.14. Right to receive dividend is established before the31.12.14 but dividend is received from B Ltd  on25.01.15.  A ltd seeks your advise as per the  IAS18 about when to recognise the dividend in their books . As A Ltd financial year  2014 books closing on  31.12.14.

 

A.When the right to receive the dividend is established

B. When Investee Company declared the dividend.

C. on cash basis i.e. when received

D.None

E. A ltd can recognise as per their choice.

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Question added by Mohammed Mohammed , Senior SAP Consultant , Abyat Mega Store
Date Posted: 2015/01/24
Sahar Alech
by Sahar Alech , Auditor / Financial Manager , Accounting Services Office

Answer is ....A.....

Sharif Muhammad
by Sharif Muhammad , Senior Principal Officer , Ansar-VDP Unnayan Bank

    (c) Dividends shall be recognised when the shareholder’s right to receive payment is established. That's why in this case A ltd shall not be booked this dividend on closing date31.12.2014, This shall be booked on received date on25.01.2015  

AZHAR NAWAZ
by AZHAR NAWAZ , Assistant Manager Accounts , Quantum Geoservices (Pvt) Ltd

Its option A (i.e When right to receive is established)

sajid mohammad
by sajid mohammad , Senior Audit assistant

A. when the right to receive dividend is estalished

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