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Should the dividends on preference shares be recognised directly in equity or as an expense in...

Should the dividends on preference shares be recognised directly in equity or as an expense in profit or loss?

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Any type of shares, whether it is preference share or equity share, dividend on those shares if declared, would not be recognised as an expense in profit and loss because it doesn't affects the net income of the company, instead dividends represents as a reward to the investors for investing in the company. Also, The cost of dividends is not included in the company's income statement because they're not an operating expense, which are the costs to run the day-to-day business.

It is only recognised directly in the shareholder's equity section in balance sheet.

Thankyou........

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