06-11-2006, 04:59 AM
Hi
Following is the query wise reply
According to IAS 10 and pursuant to the revised 4th schedule to the Companies Ordinance, 1984 the dividend proposed after the balance sheet date is not an adjusting event and shall be accounted for in the year in which it is declared. Earlier it was the requirment of the 4th schedule to recognize it as liability on the balance sheet date.
You may have seen the case opposite to it prior to the revision of 4th schedule.
The treatment of proposed dividend is simple, it shall be shown as final dividend in the statement of changes in equity.
PTR of dividend is for recepient of the dividend and not for the payer. And if a company is recepient of dividend then tax deducted shall be a final tax for the company. However, an article on this topic is also available on this website, which is quite good.
As far as WPPF's treatment is concerned ICAP's ATR 8 adresses its treatment, but WWF's treatment is same as you have shown through example and I am not sure about the underlying concept behind it.
For deferred taxation concept just click on the following link and if you are still not cleared just inform me.
http//www.accountancy.com.pk/forum/topic.asp?topic_id=3411
Loan to directors require special treatment as per IAS 24 (Related Party Transactions) and as per 4th & 5th schedule. 4th and 5th schedule requires the maximum balance outstanding during year to be disclosed. The prupose of this disclosure is to ensure that directors have not utilized unreasonably the resources of company for their personal uses. Loans from directors require the same treatment under IAS 24.
Bank lien/bank guarantee/letter of guarantees are usually shown as contingent liabilities of the company. My view is different, if the bank has given guarantee to third party against the performance of the company then it is not the contingent liability of the company under IAS 37 rather its bank's contingent liability. However, the practice is to show it as contingent liabilities of the company.
ICAPians, the unparalleled..
Following is the query wise reply
According to IAS 10 and pursuant to the revised 4th schedule to the Companies Ordinance, 1984 the dividend proposed after the balance sheet date is not an adjusting event and shall be accounted for in the year in which it is declared. Earlier it was the requirment of the 4th schedule to recognize it as liability on the balance sheet date.
You may have seen the case opposite to it prior to the revision of 4th schedule.
The treatment of proposed dividend is simple, it shall be shown as final dividend in the statement of changes in equity.
PTR of dividend is for recepient of the dividend and not for the payer. And if a company is recepient of dividend then tax deducted shall be a final tax for the company. However, an article on this topic is also available on this website, which is quite good.
As far as WPPF's treatment is concerned ICAP's ATR 8 adresses its treatment, but WWF's treatment is same as you have shown through example and I am not sure about the underlying concept behind it.
For deferred taxation concept just click on the following link and if you are still not cleared just inform me.
http//www.accountancy.com.pk/forum/topic.asp?topic_id=3411
Loan to directors require special treatment as per IAS 24 (Related Party Transactions) and as per 4th & 5th schedule. 4th and 5th schedule requires the maximum balance outstanding during year to be disclosed. The prupose of this disclosure is to ensure that directors have not utilized unreasonably the resources of company for their personal uses. Loans from directors require the same treatment under IAS 24.
Bank lien/bank guarantee/letter of guarantees are usually shown as contingent liabilities of the company. My view is different, if the bank has given guarantee to third party against the performance of the company then it is not the contingent liability of the company under IAS 37 rather its bank's contingent liability. However, the practice is to show it as contingent liabilities of the company.
ICAPians, the unparalleled..
