Dividends declared after the balance 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 Statement of Financial Position as they meet the definition of equity;
D) do not meet the IAS 37 criteria of a present obligation.

Question

Quizplus · Accepted Answer

Dividends declared after the balance date but before the financial statements are authorised for issue do not meet the IAS 37 criteria of a present obligation because the obligation to pay the dividend does not arise until the dividend is declared. Therefore, they are not recognized as a liability in the financial statements until the declaration is made.

Dividends Declared After the Balance Date but Before the Financial