Where dividends are paid/declared by an associate or joint venture and the entity prepares consolidated financial statements, the dividend revenue recognized in the ______________ accounts is eliminated on consolidation.

Question

Quizplus · Accepted Answer

In consolidated financial statements, dividends paid or declared by an associate or joint venture to the parent entity are eliminated from the parent's accounts to avoid double counting of income. This is because the parent's share of the associate's or joint venture's profits, which includes dividends declared, is already recognized in the consolidated financial statements through the equity method of accounting.

Where Dividends Are Paid/declared by an Associate or Joint Venture