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Die rekeningkundige verantwoording van skripdividendskemas in Suid‐Afrika

Die rekeningkundige verantwoording van skripdividendskemas in Suid‐Afrika Scrip dividends have become increasingly popular in South Africa since the introduction of secondary tax on companies (STC) in the 1993 budget. To date there is no accounting standard in South Africa that prescribes a particular accounting treatment for scrip dividends; therefore, different accounting approaches are used in South Africa to account for scrip dividends. These different approaches do not always meet the substance over form principle, as required by Generally Accepted Accounting Practice (GAAP). The result is that the information disclosed to the users of the financial statements differs from company to company. This study proposes an accounting treatment for scrip dividend schemes in South Africa. It concludes that the reinvestment approach is the most acceptable accounting treatment for scrip dividend schemes in South Africa. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Meditari Accountancy Research Emerald Publishing

Die rekeningkundige verantwoording van skripdividendskemas in Suid‐Afrika

P. Olivier; I. DuRand
Meditari Accountancy Research , Volume 12 (2): 15 – Oct 1, 2004
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Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
1022-2529
DOI
10.1108/10222529200400018
Publisher site
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Abstract

Scrip dividends have become increasingly popular in South Africa since the introduction of secondary tax on companies (STC) in the 1993 budget. To date there is no accounting standard in South Africa that prescribes a particular accounting treatment for scrip dividends; therefore, different accounting approaches are used in South Africa to account for scrip dividends. These different approaches do not always meet the substance over form principle, as required by Generally Accepted Accounting Practice (GAAP). The result is that the information disclosed to the users of the financial statements differs from company to company. This study proposes an accounting treatment for scrip dividend schemes in South Africa. It concludes that the reinvestment approach is the most acceptable accounting treatment for scrip dividend schemes in South Africa.

Journal

Meditari Accountancy Research – Emerald Publishing

Published: Oct 1, 2004

Keywords: Scrip dividends; Capitalisation issue approach; Reinvestment approach; Retained earnings

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