Are dividends financing activities?

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Is the dividends balance (dividends that a company paid during the year) part of the financing activities in the cash flow statement?

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score 0 · Answer 1 · 2012-12-02T18:29:31+00:00

If you refer to the cash flow statement and the cash flow from financing activities, then yes dividends paid are part of it.

Bear in mind that it is not the same as the finance costs which is part of the income statement. For the finance costs, you should only include dividends paid for redeemable preference shares. For all other shares such as the irredeemable preference shares or the ordinary shares they are part of the capital reconciliation and are included in the statement of changes in equity.