Hiii In internal reconstruction when we waive off the preference share dividend what is the impact on balance sheet and capital adjustment account Do we record it ???

Shubham · 3 Oct 2024

I said that "" no entry shall be passed i.e not recorded in books but if we do settlement of it then the entry passed . And there is difference between waived off and settlement. Waived - forgot it Settlement -pay for it.

Jitisha · 3 Oct 2024

But in the ques which I solved the waived off dividend was not recorded anywhere

Shubham · 3 Oct 2024

Preference share dividend in arrears are contingent liabilities. And that was not recorded in financial statements , only shown in notes to accounts for disclosure. If we waive any contingent liabilities then no entry shall be passed . But in case settlement of contingent liability then following entry shall be passed - Capital reduction ac dr.... To bank To eq share capital (if question said eq share have been issued for settlement of contingent liabilities)