As of January 1, 2013 there are 2 years of dividends in arrears on an issue of cumulative nonconvertible preferred shares.No dividends on preferred shares were declared in 2013.Therefore, under IFRS, on the Dec.31, 2013 financial statements, the firm issuing the preferred shares:

Question

Quizplus · Accepted Answer

Under IFRS, cumulative preferred dividends in arrears are not recognized as a liability on the balance sheet. Instead, the existence of dividends in arrears is disclosed in the notes to the financial statements. Since no dividends were declared in 2013, the arrears would increase to 3 years, which should be disclosed in a footnote.

As of January 1, 2013 There Are 2 Years of Dividends