IAS 32Chapter 5Lesson 2
Interest and dividends: classification decides where they go
Step 1 of 6Learning objectives
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Interest, dividends, losses and gains on an instrument classified as a liability go to profit or loss; distributions to holders of an equity instrument go directly to equity; the tax effect follows IAS 12.
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Learning objectives
- Explain that interest, dividends, losses and gains on an instrument classified as a liability go to profit or loss, and distributions on equity go directly to equity.
- Account for a dividend depending on whether the share is classified as a liability or as equity.
- Explain that the tax effects of distributions to holders of equity and of transaction costs follow IAS 12.
- Analyse where to recognise the tax effect of a distribution depending on the component concerned.