ACCA Applied Knowledge · Financial Accounting · Disclosure notes
Which statement about dividends and the notes to the financial statements is correct under IFRS?
A final dividend declared after the reporting date is not recognised as a liability because no obligation existed at that date. It is a non-adjusting event under IAS 10 and is disclosed in the notes instead.
- AA final dividend proposed after the reporting date is recognised as a liability at the reporting date
- BA final dividend declared after the reporting date is not recognised as a liability but is disclosed in the notesCorrect
- CInterim dividends paid during the year are disclosed only as a note and not in the statement of changes in equity
- DDividends declared after the reporting date are shown as a deduction from profit for the year
Explanation
Under IAS 10, dividends declared after the reporting period are non-adjusting events: no liability exists at the reporting date, so they are disclosed in the notes. Dividends paid in the year are shown in the statement of changes in equity, so the other options are wrong.
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