What is Proposed Dividend

Accountancy Theory September 04, 2020

Proposed Dividend

Proposed Dividend is the dividend declared or proposed to be distributed among the shareholders of the company during the financial year which will be paid in the next financial year.

Interim Dividend

An Interim Dividend is a dividend made before a company’s Annual General Meeting (AGM) and the release of final financial statement. This declared dividend usually accompanies the company’s Interim Dividend financial statement.

Is Proposed and Interim Dividend an expense?

Is Proposed Dividend and Interim Dividend an Expenses

Proposed Dividend A Dividend is not an expense or a loss. Therefore, Dividends declared and/or paid are not part of the computation of net income that is presented on the income statement. Dividends declared by corporations are reported in their statements of changes in Retained Earning and Stockholders’ Equity.

Interim Dividend A Dividend is not a expenses to a paying company, but rather a distribution of its retained earnings. Paying the dividends reduces the amount of retained earnings stated in the Balance Sheet. Simply reserving cash for a future dividend payment has no net impact on the financial statements.