Using the Dividend element is the recommended approach for recording a dividend expense in Castaway.

What is the Dividend Element?

The Castaway Dividend Element is a special Inbuilt Element designed to record declared dividend expenses, dividend liabilities, and dividend payments.

This element can be found at the bottom of the Profit & Loss section within the Chart of Accounts.

The Dividend Payable in the Balance Sheet section of the Castaway Chart of Accounts is the Partner Account of the Dividend Element where you can record any actual outstanding dividend payable balance.

Note: In addition to its use in recording dividend expenses, the Dividend Element in Castaway can also be utilised to model different types of profit distribution setups such as trusts or partnerships. In this case, you can rename the Dividend element to Trust or Partner Distribution.

Dividend expense calculation methods

When recording dividend expenses in Castaway, there are five available methods to choose from:

  1. Enter Dividend Expense
  2. Units x Rate
  3. Link to Equity Units
  4. % of Net Profit After Tax
  5. Periodic % of NPAT

To calculate the dividend payment based on share units, you can use Units x Rate or Link to Equity Units (only if the equity calculation method is Unit x Rate or Driver x Rate).

If a company distributes its entire Net Profit After Tax (NPAT) at the end of a financial year or any other period, you can use the Periodic % of NPAT method to model the dividend payment.

You can then adjust the cycle to 12, which represents a 12-month period.

Select the intended end month for an automated distribution.

This will allow you to automate the dividend expense and payment and ensure that it is distributed at the end of each financial year or another period.

Dividend Income/ Received

Dividends received can be recorded using 3 different elements, depending on your preferences and the specific requirements of the financial statements:

  1. P&L: Using the Sale element 
  2. BS: Using the Investment element
  3. BS: Using the Other A/L (Assets Liabilities) element

Using the Sale Element

One option to record the dividend received is using a Sales element.

This method treats the dividend received as a revenue item, similar to the sale of goods or services.

This approach is suitable if you wish to track dividend income separately from other investment income, or if your company has a significant dividend income stream that you want to highlight in its financial statements.

Using the Investment Element

Another option is to record the dividend received as income from investment, using the income option within the Investment element.

This method is suitable if you wish to track investment income separately from other types of income, such as revenue from sales.

When using an Investment element to record divided, you can use the Reinvested option under Investment Income Treatment drop-down menu under Investment properties for non-cash dividend income. (or use Received in Cash to model a cash dividend).


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Using the Other A/L element

Finally, you can choose to record dividends received using other A/L (Assets/Liabilities) elements.

In this case, the dividend income is entered into the revenue line, and the dividend received is added to the receipt line of the Other A/L element.

This method is suitable if you wish to track dividend income in the context of Other Current or Non-current Balance Sheet items or model a non-cash dividend by adding the value in the revenue line and not including it in the receipts line.

Note: For a list of the available account types when using Other A/L elements please refer to Element Settings in Other A/L elements.


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