Unclaimed dividends is shown on the liability side of the balance sheet under the heading of ________________.Reserves and SurplusCurrent LiabilitiesMiscellaneous ItemsProvisions (2024)

FAQs

Where is unclaimed dividend shown in balance sheet? ›

Unclaimed Dividend is Shown Under Which Side in Balance Sheet? In the balance sheet, unclaimed dividends are shown under the liability side. They are considered a liability for the company because they need to be paid by the company whenever they are demanded.

The unclaimed dividends and shares are held by the company in trust for the shareholder for a certain time period after which they are transferred to the Investor Education and Protection Fund (IEPF) account, which is managed by the Ministry of Corporate Affairs.

The unclaimed dividend comes under current liability. The term "unclaimed dividend" refers to a dividend that has been paid by the firm but has not been taken or claimed by the shareholder. Unclaimed dividends are a problem for the corporation since they must be paid as and when they are required.

Unclaimed dividend is shown on the liability side of a balance sheet under the head “Reserves and Surplus” along with capital. If a company incurs losses then it is not created. Non-current liabilities are reported on a company's balance sheet along with current liabilities, assets, and equity.

Unclaimed dividends are either from personal investments, parents, grandparents, a spouse, or any other family member. First, visit the SEC website; www.sec.gov.ng/non-mandated/ and search for your name. Check for personal information. If you find your name, all the details you need will also be shown.

In case of any default in transferring the amount, the company shall be liable to pay interest on the amount as has not been transferred. The amount remaining unpaid or unclaimed along with interest accrued thereon for seven years shall be transferred to Investor Education and Protection Fund.

The unclaimed dividend is the dividend paid by the company but not claimed by the shareholders. However, if the company does not pay a dividend after announcing it, then it is known as an unpaid dividend.

Unpaid dividends exist because there is a difference between the time when a company announces its dividend and the time when that dividend is paid. During this time, a company will record any unpaid dividends on its books, but this balance will be eliminated once the dividends are paid.

The dividends declared by a company's board of directors that have yet to be paid out to shareholders get recorded as current liabilities.

Unpaid and Unclaimed Dividends are actually very different from each other. If a company offers dividends to its shareholders, they need to claim they paid dividends. Hence, the unclaimed dividends are recorded when a certain shareholder claim the paid dividends.

What do companies do with unclaimed dividends? ›

Amounts transferred to the company's unclaimed dividends account that have not been paid or claimed for more than seven years will be transferred, along with any accumulated interest, to the Investor Education Protection Fund (IEPF), which is managed by the IEPF Authority (IEPFA), an agency of the government under the ...

Claim Submission: Shareholders can reclaim their unclaimed dividends and shares transferred to the IEPF by submitting Form IEPF 5, accompanied by the required fee. Verification by Company: The claimant's application undergoes scrutiny by the concerned company, which verifies the assertions made.