Even if there are adequate profits in Current Year (CY), can we utilize general reserve for paying dividend instead of CY's profit?

2 answers

Ravi Staff May 8, 2018

no they can be used only if there are insufficient or no profits, because even if you are planning to withdraw you have to use P&l first

So, it means that dividend shall be paid in following order:

CY's profits
then P&L Appro. A/c
and finally free reserves

We can use P&L Appro. A/c and free reserves only when insufficient profits are there



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