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This article describes a few ways to record the receipt of dividends from a share portfolio. There are a number of ways to record these payments, and the options provided may not be suitable for your needs.
This article is provided for guidance only, and might not be suitable for your business requirements. For example, it's suited to Australian businesses and doesn't cover the payout of dividends. If you need clarification or additional information, check with your accounting advisor or post your question below.
This method deals with the situation where you want the imputation credit to affect your financial records. When reporting amounts for Pay As You Go Instalments (field T1 on the Business Activity Statement), the amount of the Dividend Imputation Credit is not normally included for calculation, although it is usually included for income tax purposes.
Note: There are exceptions to this treatment. Please seek advice from your accountant or the Australian Taxation Office if you have any queries.
The Inventory module can be used to help you keep track of your Imputation Credits, where they are deemed to have no effect on your financial records.
Three inventory items need to be created, all of them with the option "I sell" selected:
The linked income account for all three items needs to be to your Dividend Income Account. See our example below.
Once the items are set up:
This Sale will create the following Journal Entry:
Note: The receipt can be deposited into the bank either by completing the 'paid today' field, or going to Sales and using Receive Payments. This increases your dividend income by the dividend received, and negates any financial effect in recording the Imputation Credit.
To find out how many and the value of any imputation credits, the Item Sales Detail report can be used as follows:
A sample report is shown below.
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