Dividends Declared After the Reporting Period

question 21

Multiple Choice

Dividends declared after the reporting period:

• A)meet the criteria for recognition as a liability.
• B)satisfy the criteria for recognition as an expense.
• C)are recognised in the statement of financial position as they meet the definition of equity.
• D)do not meet the AASB 132 recognition criteria for liabilities.

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Definitions:

Asset Replacement

The process of substituting old assets with new ones to maintain or improve operational efficiency.

Asset Expansion

The process of increasing a company's investment in current and fixed assets to boost its capacity and efficiency.

Pretax Proceeds

The amount of money generated from a sale or transaction before any taxes are deducted.

Working Capital

Working capital, rephrased from net working capital, indicates the liquidity available to a business for day-to-day operations, calculated as current assets minus current liabilities.