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+--- Thread: Zakat deduction on dividend and audit report (/thread-zakat-deduction-on-dividend-and-audit-report)
Zakat deduction on dividend and audit report - bilal azhar - 08-17-2009
As per IAS-10 dividend declared after the balance sheet date is a non adjusting event and should not be recorded as liabilty.only its disclosure is required. it will be should as paid in next year. now my question is
that a company has declared a dividend after the balance sheet date.it has deducted withholding tax @ 10% but has not deducted zakat @ 2.5%. para (d) of audit report says "no zakat was deductible at source under zakat and ushr ordinance,1980. do i need to change this para this year or next year.
- kamranACA - 08-17-2009
Bilal,
If Zakat was required to be deducted and has not been deducted, auditor has to qualify/modify his opinion.
Regards,
KAMRAN.
- bilal azhar - 08-17-2009
yes i think zakat must be deducted on dividend paid even by a private company.
but why should a non adjusting event have an effect on audit report. if its proper disclosure is given then why should we qualify?
- kamranACA - 08-18-2009
Dear,
You will qualify in the year when dividend is paid without deduction of zakat and not in the year of disclosure.
Regards,
Kamran.