Silky Limited, a private company that complies with accounting standards for private enterprises (ASPE), has redeemable preferred shares outstanding that carry a dividend of 5 If the shares are not redeemed within five years, the dividend will double every five years from then on How should Silky a...

Under the terms of the agreement with the preferred shareholders it is highly likely that Silky L ...

Silky Limited, a private company that complies with accounting standards for private enterprises (ASPE), has redeemable preferred

Question:

Silky Limited, a private company that complies with accounting standards for private enterprises (ASPE), has redeemable preferred shares outstanding that carry a of 5%. If the shares are not redeemed within five years, the will double every five years from then on. How should Silky account for this instrument? How should Silky treat the dividends associated with the redeemable preferred shares?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...