Reporting (and accounting) for paying dividends is in fact rather straight forward.<\/p>\n
Say that during the reporting period your company paid dividends in the amount of 2,100 as within our example statement of changes in equity. Reporting and recognizing an accounting entry on paying dividends whilst the equity has several accounts is done from one account only. Payments out of other equity accounts are labelled as \u2018payments out of equity\u2019 or something similar, but normally not \u2018dividends\u2019. As dividends refer to payments out of something that has been earned, payment of dividends is always done out of \u2018retained earnings.\u00a0<\/p>\n
On one side you\u2019re showing the payment, that\u2019s you decrease your cash account and on the other you decrease your retained earnings reflecting on the amount the owners are taking out of the company as their earnings, as their reward.<\/p>\n
On the statement of changes in owner\u2019s equity paying dividends is shown on a separate line (a third change taking place to our equity in our example) and the change itself is reflected on the \u2018retained earnings\u2019 line only. Note also that it\u2019s shown as a negative change.<\/p>\n","protected":false},"excerpt":{"rendered":"
Reporting (and accounting) for paying dividends is in fact rather straight forward. Say that during the reporting period your company paid dividends in the amount of 2,100 as within our example statement of changes in equity. Reporting and recognizing an accounting entry on paying dividends whilst the equity has several accounts is done from one […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-8783","post","type-post","status-publish","format-standard","hentry","category-4-6-statement-of-changes-in-equity"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/8783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=8783"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/8783\/revisions"}],"predecessor-version":[{"id":8784,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/8783\/revisions\/8784"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=8783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=8783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=8783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}