PRE & POST ACQUISITION DIVIDEND – CA V G S Mani

  • When the dividend is declared from pre-acquisition profits, and later on received by purchaser of investment, then such amount of dividend is deducted from the cost of investment. Dividend received out of pre-acquisition profits is referred as pre-acquisition dividend.
  • Post – Acquisition Dividend if received should be credited to Profit & Loss Account. Dividend received out of post-acquisition profits is referred as post-acquisition dividend.
  • Pre-acquisition dividend is recovery of cost whereas post-acquisition dividend is treated as income

Post navigation