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Directors dividends - filleted accounts

FRS102 1AC.35 is quite clear about disclosable RPT includes "Transactions with directors ... include directors’ remuneration and dividends paid to directors." It was my understanding that these should also be disclosed in the filletted accounts but I never see them when I'm looking at company accounts at Companies House. We use CCH AP and that puts directors dividends in the filleted accounts. Should they be included or not?

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08th Dec 2018 09:48

You can disclose anything over and above legal requirements but dividends do not need to be disclosed. The FRS section quoted relates to transactions carried out not under normal market conditions and I suspect that wouldn't be the case with dividends. On a day to day basis the most common balance sheet notes under FRS105 are the average number of employees (for accounting periods commencing on or after 1.1.17 I think) and the company's registered office. Even under FRS102 the equity statement (showing dividends) is only recommended and not compulsory.

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to thomas34
08th Dec 2018 10:03

Thanks for clarifying that.

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By djn24
12th Dec 2018 10:20

We also use CCH AP.
I spoke to ACCA about this issue and they have said that it's recommended but not compulsory.

They said you only need to disclose items that are not at normal commercial rates. The argument is whether paying £100k of dividends on 1 ordinary share is normal.
Probably isn't but then again you could argue that it would be as they are owner a owner managed business.

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to djn24
13th Dec 2018 14:18

I'd emailed the ACCA before you posted your replay. They've come back and said:

The FRC refused to define concluded under normal market conditions’. It is a matter of judgement. Because it is not defined, there will not be a breach of the regulations if a dividend is not disclosed. However, the standard says in the appendix that the disclosure of dividends is encouraged. To err on the side of caution and to observe the “encouragement”, many model accounts disclose dividends. If dividends are material in relation to the size of the company, they should be nevertheless disclosed for the accounts to show true and fair view.

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