IAS 33Chapter 3Lesson 2
Preference dividends: cumulative and non-cumulative
Step 1 of 6Learning objectives
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Before dividing, what belongs to preference shareholders is taken out of profit: after-tax dividends, cumulative ones due or non-cumulative ones declared, plus settlement differences and similar effects.
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Learning objectives
- Explain why preference dividends are deducted from the ordinary holders' profit.
- Tell the treatment of cumulative preference shares from non-cumulative ones.
- Calculate the profit belonging to ordinary holders and basic earnings per share.
- Place settlement differences and similar effects on preference shares.