BC4 For this limited clarification of IAS 10 the main change made is in paragraphs 12 and 13 (paragraphs 11 and 12 of the previous version of IAS 10). As revised, those paragraphs state that if dividends are declared after the balance sheet date, [IAS 1 (as revised in 2007) replaced the term ‘balance sheet date’ with ‘end of the reporting period’. When it issued IFRS 18, the IASB carried over these requirements in IAS 1 to IFRS 18.] an entity shall not recognise those dividends as a liability at the balance sheet date. This is because undeclared dividends do not meet the criteria of a present obligation in IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The Board discussed whether or not an entity’s past practice of paying dividends could be considered a constructive obligation. The Board concluded that such practices do not give rise to a liability to pay dividends. [In 2007 the Board was advised that paragraph 13, taken in isolation, could be read to imply that a liability should be recognised in some circumstances on the basis that a constructive obligation exists, such as when there is an established pattern of paying a dividend. Therefore, the Board amended paragraph 13 by Improvements to IFRSs issued in May 2008 to state that no such obligation exists.]