ACC-1A Lecture Notes - Lecture 30: Standard Accounting Practice, Retained Earnings
Document Summary
Not defined in the corporations acct 2001, aas or statements of accounting concepts of the framework for the preparation and presentation of financial statements. Reserves can take many different forms and terminology between companies vary greatly. Accounting standard aasb 101 requires the disclosure of reserves in the b/s and requires disclosure in the notes for each class of reserves: description, purpose, o/b amount, nature/amount of change, c/b amount. Cash dividends can be paid out of general reserves. 3 more common reserves: general reserve, revaluation surplus and foreign currency translation reserve. Foreign currency translation reserve relates to exchange differences, which arise in translating the accounts of a self-sustaining foreign operation into domestic currency. Dividends may be provided for on the basis of sc or paid according to the no. of shares held: e. g. dividend of 5% could be declared (5% of sc, or dividend is declared at 20c per share. Interim dividends based on an expectation of adequate profits.
