Comparison between Indian GAAP and Ind-AS/ IFRS
The difference in the presentation and classification of financial instruments was discussed here. Moving ahead, since redeemable preference shares are classified differently under Indian GAAP and Ind-AS/IFRS, the treatment of dividend on redeemable preference shares also needs to be discussed.
Under Indian GAAP, preference dividends are always recognised as an appropriation to the profits similar to equity dividend and are never treated as financing expense.
However, under Ind-AS/ IFRS, dividends on redeemable preference shares classified as financial liability is recognised as finance cost in the statement of profit or loss and other comprehensive income.