Dividends declared after the reporting period

Learning objectives

• Explain why dividends declared after the end of the reporting period are not a liability at the end of the reporting period, and where they are disclosed.L1, L2
• Record the declaration of dividends in the period in which it occurs and calculate the amount to be disclosed in the notes.L2

Normative references

• IAS 10 §12Dividends declared to holders of equity instruments (as defined in IAS 32) after the reporting period are not recognised as a liability at the end of the reporting period.
• IAS 10 §13Dividends declared after the reporting period but before the financial statements are authorised for issue are not recognised as a liability at the end of the reporting period because no obligation exists at that time; they are disclosed in the notes in accordance with IAS 1.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

11 questions

• Dividends declared to shareholders after the reporting period are recognised as a liability at the end of the reporting period.L1
• Dividends declared after the reporting period but before the financial statements are authorised for issue are disclosed in the notes.L1
• Why is a dividend declared after the reporting period not a liability at the reporting date?L1
• Ratard's board declares in February a dividend for the year ended 31 December; the accounts are authorised in March. How does this dividend appear in the accounts for the year just ended?L2
• Sastard, whose share capital comprises {shares} shares, has a 31 December year-end. On 20 February, before the accounts are authorised, its board declares a dividend of {dividend_per_share} per share. What liability should be recognised at 31 December and what amount disclosed in the notes?L2
• A dividend of {dividend_per_share} per share is declared on 5 March on the {shares} shares of Seundix, whose accounts for the year ended 31 December are authorised on 25 March. Determine the dividend liability at the reporting date and the amount to disclose in the notes.L2
• Staimenne's draft statement of financial position at 31 December shows current liabilities of {recorded_current_liabilities}, including a dividend of {dividend_declared_after} declared on the following 12 February. What amount of current liabilities should be presented at the reporting date?L2
• Styrnot records 'Retained earnings / Dividends payable' at 31 December for a dividend its board declared on the following 18 February. What is the error?L2
• Syrgia, which declared a significant dividend on 3 March, before its accounts were authorised on 24 March, does not recognise it as a liability and says nothing about it in its notes. What is the error?L2
• Syscore has a 31 December 2025 year-end; on 10 March 2026, its board declares a dividend of {dividend_declared}. No entry is made at 31 December 2025. Record the entry at the declaration date, in 2026.L2
• In its draft accounts at 31 December, Sérouël recorded a liability of {dividend_recorded} for a dividend its board declared on the following 14 February. Record the correcting entry at 31 December.L2