Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I have been told by a colleague who is studying accounting that our current accounting policy in relation to dividend may not be correct or

  1. I have been told by a colleague who is studying accounting that our current accounting policy in relation to dividend may not be correct or in accordance with accounting standards. My colleague stated that many public companies have dividend policies, which have been communicated to shareholders as to the amount of the fully franked distribution, which will be paid to shareholders. It may be argued that such a policy provides the company with a constructive liability to pay the dividend. Currently, the dividend is not treated as constructive liability in Cairns Ltd. Could you please advise whether the constructive liability should arise?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For School Administrators Tools For School

Authors: Ronald E. Everett, Donald R. Johnson, Bernard W. Madden

3rd Edition

1610487710, 978-1610487719

More Books

Students also viewed these Accounting questions

Question

How are values illustrated in the case?

Answered: 1 week ago

Question

Describe S. Truett Cathys self-concept and self-efficacy.

Answered: 1 week ago