Dividend Payment for Financial Year 2013-14

[Bhairob Chandra Bor]

Respected Expert,

we want to entered the proposed dividend in the profit & loss a/c for the year ended 2013-14. dividend will be declared & paid after the declaration of final dividend for the financial year 2013-14 in AGM will be held in June, 2014. To close our balance sheet we have to entered that dividend amount  (as proposed in the Board meeting recently held while adopting the balance sheet at the board meeting). We have audited our books for 2013-14 as per the Companies Act 1956. kindly advice in this situation is it necessary to calculate the depreciation as per schedule II as per the new companies act 2013?  As per our understanding the new companies act u/s 123 -declaration of dividend will not apply for entering the proposed dividend amount (actual declaration & payment will be In June, 2014 ) in the balance sheet of 2013-14. Kindly advise.

Regards,

bcb     

[DR.MARIAPPAN GOVINDARAJAN]

I think that you might have clarified this issue and did the needful.

AI Summary

Dividend declaration timing affects whether a proposed dividend is recorded in prior year financial statements; guidance was not provided. Query whether a proposed dividend for the year ended 2013-14, to be declared and paid after year-end at the AGM, may be entered in the Profit & Loss account and balance sheet for 2013-14, whether declaration provisions of the Companies Act apply to such recognition, and whether depreciation must be computed as per Schedule II of the Companies Act 2013; available reply is non substantive and gives no definitive guidance.