Proposed dividends by subsidiary company, Financial Accounting

Proposed dividends by subsidiary company

If the subsidiary company has proposed some dividends appearing under current liabilities then the dividends are payable to the holding company and minority interest.

The share that belongs to the Minority Interest will remain as a current liability and will be added to the proposed dividends of the holding company to form the group proposed dividends.

However, the share that belongs to the holding company is a form of inter-company balance and should thus be excluded from the consolidated balance sheet.

The following entries are relevant;
a) If the holding company has accrued its share of proposed dividends.

DR.  Group proposed dividends
      CR. Group receivables (includes dividends receivable)

b) If the holding company has not accrued for the share of its proposed dividends

DR.   Group proposed dividends
       CR.  Group retained profits.

Posted Date: 12/12/2012 3:02:41 AM | Location : United States







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