If an entity declares dividends to holders of equity instruments (as defined in Ind AS 32, Financial Instruments Presentation) after the reporting period, the entity shall not recognize those dividends as a liability at the end of the reporting period.


If dividends are declared after the reporting period but before the financial statements are approved for issue, the dividends are not recognized as a liability at the end of the reporting period because no obligation exists at
that time.

Such dividends are disclosed in the notes in accordance with Ind AS 1, Presentation of Financial Statements. It depends on the fact whether the event existed at the end of the period or not.

One thought on “How the liabilities should be recognized if dividends are declared after the reporting period but before the financial statements are approved for issue?

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