Distinguish between Interim Dividend and Final Dividend.

Interim Dividend and Final Dividend

Interim Dividend:

Meaning: A dividend declared in between two Annual General meetings of the Company by the directors is known as Interim Dividend.

Year of Declaration: It is declared during the current financial year.It is declared during the current financial year.

Does declaration  constitute a liability : It declarations does not create a liability against the company.

Revocation/Variation: After declaration it can be revoked or varied before its payment.

Final Dividend:

Meaning: It is a dividend which is It is a dividend which is declared at the annual general meeting of the shareholders and is declared by the shareholders only on the recommendation of the directors.

Year of Declaration: it is declared after the end of financial year.

Does declaration  constitute a liability : It declarations creates a liability against the company.

Revocation/Variation: After declaration it can neither be revoked nor be varied.