Eliminating Dividends Declared by Subsidiary | Group Financial Statements

[@stefanmiladinovic4567]

Let's say the subsidiary (S Ltd) has already paid the dividend to the Holding. What would be the bookings on S ltd's side for the dividend payment? Thanks a lot!

[@yysskk7445]

2:58 : Would the following entry be correct?
Cr. Dividend declared $80
Cr. NCI $20
Dr. Shareholder for dividends $100
Thanks

[@jessz.1723]

Umm so at the end, from a consolidated income statement perspective, we will have a total of 80 reporting as dividend income even though It’s inter company?

[@JoieSabordo-oz2jt]

Hello, dividends declared is a income or balance sheet account?

[@TabaldiEducation]

Dividends reclared goes to the statement of changes in equity against Retained Earnings. The journal will be: DR: Retained Earnings; CR: Dividends Payable/Bank

[@gerhardlabuschagne6406]

Thanks. H will be liable to pay a 15% tax on the dividend. On consolidation, when the dividend income is eliminated, what happens to the tax in the income statement?

[@TabaldiEducation]

Hi Gerhard. Dividends from companies to companies are exempt from dividends tax

[@monicamanilal5825]

Why do we credit the full 100 dividends declared, when we only want to eliminate 80?

[@TabaldiEducation]

Hi Monica. Remember, when we consolidate, we first add 100% of H and 100% of S together (because H has control over S). So the Dividends Declared of 100 (from S's financials) need to be eliminated. Rewatch the video, Faatima explains this around 2:16

[@zainalii]

that is quality education!

[@TabaldiEducation]

Thanks, Zain!