Consolidation of Company

AS 21, 23, 27

Adjustment 8: Proposed Dividend

Equity Shares: Proposed Dividend, which remain proposed till date of

acquisition is called Proposed Dividend.

Following Steps are applied :

Step 1: Calculate proposed dividend amount

Step 2: Reduce Minority share and show proposed dividend minority, as liability in Consolidated B/s.

Note: Reduction will be with share of proposed Dividend belonging to minority shareholders.

Note: Dividend is calculated as follows :

Final Dividend on closing Share Capital of Previous Year.

Interim Dividend is calculated on capital, at the time of distribution of Dividend.

Proposed Dividend is calculated on Closing Share Capital of Year, for which dividend is being proposed.

Preference Shares :

Whenever Preference Share Capital is given in subsidiary. Then Preference Dividend which is still unpaid, will be proposed and processed using long method.

It means such Proposed Dividend will be reduced from AOP of

Subsidiary, and distributed in Preference holding Ratio.

Journal :

i) Preference Share of Subsy A/c Dr

To Preference Dividend Payable A/c

( Being dividend recorded)

ii) Preference Dividend Receivable A/c Dr

To P&L of H ltd A/c

( Being Dividend Recorded )

( Share of % in Pref. Holding Co.)

iii) Preference Dividend Payable A/c Dr

To Preference Dividend Receivable A/c

( Being Amount cancelled)