Independent Limited declared a final dividend of CO.15 per ordinary share on 13 April 20X4 in respect of the financial year ended 31March 20X4. The accountant, Mr. Poll, has recorded the dividend as an expense on the income statement for the year ended 31 March 20X4 and a liability on the balance sheet at 31March 20X4.
The financial statements have not yet been finalized.
Analyze the treatment of the dividend declaration.
Your answer should refer to the relevant definitions provided in The Framework. You should state whether or not the accounting treatment is acceptable, providing an alternative treatment where appropriate. A discussion of the recognition criterion is not required.