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A Ltd invested in equity shares of the B Ltd. B Ltd declared dividend on30.11.14. Right to receive dividend is established before the31.12.14 but dividend is received from B Ltd on25.01.15. A ltd seeks your advise as per the IAS18 about when to recognise the dividend in their books . As A Ltd financial year 2014 books closing on 31.12.14.
A.When the right to receive the dividend is established
B. When Investee Company declared the dividend.
C. on cash basis i.e. when received
D.None
E. A ltd can recognise as per their choice.
Answer is ....A.....
Its option A (i.e When right to receive is established)
A. when the right to receive dividend is estalished
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