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Are dividend payments shown as an expense on the income statement?

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Question ajoutée par Yazan Ahmad , programmer , wysada
Date de publication: 2017/01/04
Muhammad Kassab  CPA CMA CertIFR
par Muhammad Kassab CPA CMA CertIFR , Accounting Manager , Marine Buildings Landmarks

when a company declares cash dividends, the amount is transferred from equity to liabilities section in the Balance sheet, by debiting retained earnings and crediting cash dividends payable.

in case of stock or equity dividends, again the transaction is only located in the equity section of the BS.

a property dividend will locate the transaction between Assets and Equity (Retained earnings)

 

all are balance sheet accounts transactions, no gain or loss, revenue or expense is involved..

 

Note : in case asset dividends, the asset should be re-evaluated to fair value, in this case a profit or loss of re-evaluating the asset would arise.

but this profit or loss are the result of re-evaluating the asset, and doesn't relate to dividends declaration or distribution.

 

 

Ahmed mohsen
par Ahmed mohsen , Senior Accountant , Main Poly Clinic

they are not expenses.

The dividends declared and paid by a corporation will be reported as a use of cash in the financing section of the statement of cash flows. Dividends are also reported on the statement of changes in stockholders' equity. Dividends on common stock are not reported on the income statement since they are not expenses.

Ashraf E. Mahmoud (PhD)
par Ashraf E. Mahmoud (PhD) , University Lecturer, Freelancer Consultant and Trainer for Int'l Business & Banking TF. , FreeLancer

Thanks for invitation,

Agree with the reply of Mr Soliuman Gendy.

Soliman Abd  ALmalak Gendy
par Soliman Abd ALmalak Gendy , مدير ادارة مراقبة حسابات , الجهاز المركزى للمحاسبات

A dividend paid by a corporation isa distribution of previously earned net income. *A dividend is not an expense or a loss. *Dividens declared by corporations are reported in their statemens of changes in Retained Earnings and stockholders'equity

manseer muhammed ali
par manseer muhammed ali , Accountant General , Royal Lighting L.L.C & Royal Furnishing LLC

A corporation's dividends are not an expense and therefore will not appear on its income statement. Cash dividends are a distribution of part of a corporation's earnings that are being paid to its stockholders. ... Earnings available for common stock is reported on the income statement.

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