CAT / FIA FFA Syllabus D. Recording Transactions And Events - Record dividends - Notes ^{12 / 14}

Dividends are an appropriation of retained earnings to shareholders.

They are not an expense in the statement of profit or loss.

Accounting treatment

Dr Retained Earnings (SOFP)
Cr Dividends Payable (SOFP)

Dividends can be paid during the year (interim dividends) or at the end of the year (final dividends).  

The final dividend will only be accounted for if it has been declared before year end. 

Otherwise, it will be disclosed as a note to the financial statements