When proposed dividend is a contingent liability what is the entry in cash flow
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Explanation:
As per latest amendment, the proposed dividend will not be shown in the Cash Flow Statement and Balance Sheet also. It will be mentioned in the adjustments only. The previous year proposed dividend will be shown as outflow under financing activity considering that dividend is paid in the curreny year. Also the current year proposed dividend will not be considered as outflow as the payment of the same happens in next year. The current year proposed dividend will be added back to net profit to calculate the income before tax and extraordinary items.
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