Why schedule vi

But the formats in many areas are not clear and raise many questions regarding presentation of particular items under particular head. There will be loads of different interpretations as addition and substitutions of line items and sub items are required to be disclosed under Provisions of Accounting Standards, Provisions of The Companies Act, and other various other allied statutory acts, which will lead to different presentation formats by the corporates and eventually, uniformity and standardization which is the intention of the Government may not be achieved.

Still lot of clarifications are needed from Government to plug loose ends. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. This website is meant solely for the purpose of information and not for the purpose of advertising. The requirements of the Revised Schedule VI however, do not apply to following companies as referred to in the proviso to Section 1 and Section 2 of the Act: 1.

Any insurance or banking company, or 2. Any company engaged in the generation or supply of electricity or 3. The revised schedule gives prominence to Accounting Standards AS i. The revised schedule prescribes a vertical format for presentation of balance sheet therefore, no option to prepare the financial statement in horizontal format. It ensures application of uniform format.

All Assets and liabilities classified into current and non-current and presented separately on the face of the Balance Sheet. Details pertaining to aggregate number and class of shares allotted for consideration other than cash, bonus shares and shares bought back will need to be disclosed only for a period of five years immediately preceding the Balance Sheet date. Specific disclosures are prescribed for Share Application money.

The application money not exceeding the capital offered for issuance and to the extent not refundable will be shown separately on the face of the Balance Sheet. Hence, amounts due on account of other contractual obligations can no longer be included in the trade receivables. Tangible assets under lease are required to be separately specified under each class of asset. In the Old Schedule VI, details of only capital commitments were required to be disclosed.

Under the Revised Schedule VI, other commitments also need to be disclosed. This format of Statement of Profit and Loss does not mention any appropriation item on its face. As per revised schedule VI, any item of income or expense which exceeds one per cent of the revenue from operations or Rs. In respect of companies other than finance companies, revenue from operations need to be disclosed separately as revenue from a sale of products, b sale of services and c other operating revenues.

The broad heads need to be decided based on materiality and presentation of true and fair view of the financial statements. Further following critical points are to be considered: Format of cash flow statement not prescribed hence companies which are required to present this statement i.

The format of the statement of assets and liabilities required at the end of the half year, is drawn from the pre-revised schedule VI, it will have to be followed as clause 41 V specifically required that disclosure in balance sheet items in half yearly results shall be in the format in Annex IX drawn from schedule VI of The Companies Act, MCA vide its circular dated 5.

Also suitable notification is required from SEBI to this effect. Earlier the stand was different under the Companies Accounting Standards Rules, , that wherever the accounting standards was not in conformity with the law, the law would prevail and financial statements will be prepared accordingly, but in revised schedule VI, not only it gets overridden by AS but also get modified accordingly so it seems difficult for the corporate to have uniform presentation of Balance Sheet and lot of controversy may arise.

Revised Schedule VI introduced new items i. There are load of changes , current assets may turn out to non current assets, quick ratios may change, banks will have to reconsidered the corporate ratios again as borrowing from banks are based on a host of ratios calculated both on actual and projected.

The Revised Schedule VI has removed a number of disclosure requirements that were not considered relevant in the present day context. An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. Where the normal operating cycle cannot be identified, it is assumed to have a duration of 12 months.

A liability shall be classified as current when it satisfies any of the following criteria:. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. A receivable shall be classified as a 'trade receivable' if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. A payable shall be classified as a 'trade payable' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business.

Additions and deductions since last balance sheet to be shown under each of the specified heads. Similarly, the balance of 'Reserves and Surplus', after adjusting negative balance of surplus, if any, shall be shown under the head 'Reserves and Surplus' even if the resulting figure is in the negative.

Nature of security shall be specified separately in each case. Share application money includes advances towards allotment of share capital. The terms and conditions including the number of shares proposed to be issued, the amount of premium, if any, and the period before which shares shall be allotted shall be disclosed.

It shall also be disclosed whether the company has sufficient authorized capital to cover the share capital amount resulting from allotment of shares out of such share application money. Further, the period for which the share application money has been pending beyond the period for allotment as mentioned in the document inviting application for shares along with the reason for such share application money being pending shall be disclosed.

Share application money not exceeding the issued capital and to the extent not refundable shall be shown under the head Equity and share application money to the extent refundable i. Under each classification, details shall be given of names of the bodies corporate [indicating separately whether such bodies are i subsidiaries, ii associates, iii joint ventures, or iv controlled special purpose entities] in whom investments have been made and the nature and extent of the investment so made in each such body corporate showing separately investments which are partly-paid.

In regard to investments in the capital of partnership firms, the names of the firms with the names of all their partners, total capital and the shares of each partner shall be given. This is an all-inclusive heading, which incorporates current assets that do not fit into any other asset categories. The amount of dividends proposed to be distributed to equity and preference shareholders for the period and the related amount per share shall be disclosed separately.

Arrears of fixed cumulative dividends on preference shares shall also be disclosed separately. Where in respect of an issue of securities made for a specific purpose, the whole or part of the amount has not been used for the specific purpose at the balance sheet date, there shall be indicated by way of note how such unutilized amounts have been used or invested.

If, in the opinion of the Board, any of the assets other than fixed assets and non-current investments do not have a value on realization in the ordinary course of business at least equal to the amount at which they are stated, the fact that the Board is of that opinion, shall be stated. The provisions of this Part shall apply to the income and expenditure account referred to in sub-section 2 of section of the Act, in like manner as they apply to a statement of profit and loss.

A In respect of a company other than a finance company revenue from operations shall disclose separately in the notes revenue from. B In respect of a finance company, revenue from operations shall include revenue from. Revenue under each of the above heads shall be disclosed separately by way of notes to accounts to the extent applicable. A company shall disclose by way of notes additional information regarding aggregate expenditure and income on the following items Note: Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements.

In exercise of the powers conferred by clause a of sub-section 1 of section read with sub-section 1 of section A and sub-section 3C of section of the Companies Act, 1 of , the Central Government hereby makes the following amendment to paragraph 2 of the Notification No.

Substituted by Notification No. SO E , dated , w. SO E , dated ]. Para 2 of the Notification provides that the notification shall come into force for the Balance Sheet and Profit and Loss Account to be prepared for the financial year commencing on or after Substituted for "This notification shall come into force from the date of publication in the Official Gazette" by Notification No. Depending upon the turnover of the company, the figures appearing in the Financial Statements may be rounded off as below: Turnover Rounding off i Less than one hundred crore rupees To the nearest hundreds, thousands, lakhs or millions, or decimals thereof.

Note : This part of Schedule sets out the minimum requirements for disclosure on the face of the Balance Sheet, and the Statement of Profit and Loss hereinafter referred to as "Financial Statements" for the purpose of this Schedule and Notes. Figures as at the end of current reporting period Figures as at the end of the previous reporting period 1 2 3 4 I. An asset shall be classified as current when it satisfies any of the following criteria: a it is expected to be realized in, or is intended for sale or consumption in, the company's normal operating cycle; b it is held primarily for the purpose of being traded; c it is expected to be realized within twelve months after the reporting date; or d it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

All other assets shall be classified as non-current. A liability shall be classified as current when it satisfies any of the following criteria: a it is expected to be settled in the company's normal operating cycle; b it is held primarily for the purpose of being traded; c it is due to be settled within twelve months after the reporting date; or d the company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

All other liabilities shall be classified as non-current. A company shall disclose the following in the notes to accounts: A. Additions and deductions since last balance sheet to be shown under each of the specified heads ii A reserve specifically represented by earmarked investments shall be termed as a 'fund'. Long-term provisions The amounts shall be classified as: a Provision for employee benefits.

Other current liabilities The amounts shall be classified as: a Current maturities of long-term debt; b Current maturities of finance lease obligations; c Interest accrued but not due on borrowings; d Interest accrued and due on borrowings; e Income received in advance; f Unpaid dividends g Application money received for allotment of securities and due for refund and interest accrued thereon. Short-term provisions The amounts shall be classified as: a Provision for employee benefits.

Tangible assets i Classification shall be given as: a Land.