FRC Lab Report: Disclosure of dividends – policy and practice

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Dividends, and everything related to them cause complications for accountants. One simple reason for this is that an additional minefield of legal requirements & regulations come into play when an accountant is dealing with dividends.

The attached report is produced by the FRC, is practice informed, and discusses best-practice regarding the disclosure of dividends, and dividend policy, to stakeholders. For those with limited time, there is a “quick read”  section which serves as an excellent executive summary at the start of the report.

FRC Lab Report

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Distribution of profits by companies

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Attached is an exposure draft of updated guidance on realised and attributable profits under the UK Companies Act 2006 issued by the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland in March 2016. Without being able to categorically give an “all-clear”, the treatment of issues in the attached document should broadly be the same for the Irish Companies Act 2014.

Due to the complex nature of this area of accounting/company law, most accounting textbooks only deal with the issue at relatively high level. I’m not advising that anyone go through the attached as a form of light reading but I do think it could serve as a handy reference document:

ICAEW Draft Tech Release

Companies Act 2014 Consolidation Exemption

The 2014 Companies Act is still in it’s infancy but one part that accounting students should be aware of is the section on consolidation exemption for companies preparing accounts under Irish/UK GAAP (FRS):

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Note that the above consolidation exemption is not available to companies preparing accounts under IFRS although there are separate exemption criteria for IFRS companies outlined in IFRS 10.