What is Included In Directors Emoluments Or Remuneration

Director Remuneration Includes Dividends And Its Accounting Treatment

Directors Emolument or Remuneration includes salary, fees, benefits, Dividends, and employer pension contributions. These are paid to directors from time to time during their whole careers.

According to Companies Act, it is legally required for specific companies to disclose the director’s remuneration or emolument in Financial Statements.

 

Director Remuneration Journal Entry

The following entry is recorded for director emolument as shown below:

 

                              Directors Remuneration a/c  XXX

 

                                                                         Cash a /c / Bank a/c XXX

 

                                (Director Remuneration Paid To Directors For Cash / Bank)

 

For companies, director remuneration is an expense, so it is recorded in income statement or profit and loss account.

Where Does Directors Remuneration Go In Balance Sheet

If director remuneration is not paid by the company to its directors for the period, then Directors remuneration or emolument payable account is created which is shown on balance sheet as a current liability. It is payable by the company to its directors for the period.

 

Director Remuneration Payable Entry

 

                             Director Remuneration a/c  XXX

 

                                                                        Director Remuneration Payable a/c  XXX

 

                                      (Director Remuneration Payable for the Period)

 

Is Director Remuneration is Direct Expense or Indirect Expense?

It is a indirect expense as it is not related to the cost of production.feed

 

Is directors' Remuneration An Operating Expense

Yes, it is recorded under General and Administrative Expenses section of income statement.