Provision for dividends declared

Question

Our company declared dividends after the balance sheet date. Ia it required by IFRS to provision or disclose this **** in accounts (accounts are still being finalized)?

Answer 1

As per IAS 10 - events after the reporting period, it is given:

If an entity declares dividends to holders of equity instruments (as defined in IAS 32 Financial Instruments: Presentation) after the reporting period, the entity shall not recognise those dividends as a liability at the end of the reporting period.

If dividends are declared after the reporting period but before the financial statements are authorised for issue, the dividends are not recognised as a liability at the end of the reporting period because no obligation exists at that time. Such dividends are disclosed in the notes in accordance with IAS 1 Presentation of Financial Statements.