Dividends declared after the balance sheet date but before the financial statements are authorised for issue:
A)meet the criteria for recognition as a liability
B)satisfy the criteria for recognition as an expense
C)are recognised in the balance sheet as they meet the definition of equity
D)do not meet the AASB 137 criteria of a present obligation.

Question

Quizplus · Accepted Answer

Dividends declared after the balance sheet date but before the financial statements are authorised for issue are not recognised as a liability as they do not meet the criteria of a present obligation under AASB 137. They are not recognised as an expense or equity either. Instead, they are disclosed in the notes to the financial statements to inform the users of the potential distribution of profits.

Dividends Declared After the Balance Sheet Date but Before the Financial