Form and contents of Balance sheet and Profit & Loss Account of a company under Schedule VI to the Companies Act, 1956 revised.
Ministry of Corporate Affairs [MCA], Government of India, has on 3 March 2011, hosted on its website, the revised Schedule VI to the Companies Act, 1956 which deals with the Form of Balance sheet, Profit & Loss Account and disclosures to be made therein.
The revised Schedule VI has been framed as per the existing non-converged Indian Accounting Standards notified under the Companies (Accounting Standards), Rules, 2006 and has no connection with the converged Indian Accounting Standards.
This Revise schedule VI is also applicable for CA Students appearing November 2012 examinations onward.
The changes brought in revised format have been segregated in the following manner: –
1. Balance Sheet
2. Profit & Loss A/c
1. While both Vertical and horizontal forms of presentation were allowed under old schedule VI, only vertical form is allowed under revised Schedule VI.
2. Once a unit measurement is used, it should be used uniformly in the Financial Statements.
Changes in Balance Sheet
1. Change in nomenclature – “Sources of Funds” has been replaced with “Equity & Liabilities”
2. Share Capital – Company would need to show in sub-head à Shares held more than 5% in company along with number of shares
3. Debit Balance of P&L A/c shall now be shown as negative figure under head Surplus
4. Liabilities will now broadly be classified as
• Current Liabilities &
• Non Current Liabilities
5. Deferred payment liabilities and loans & advances from related parties to be shown separately under head “Long term Borrowings”.
6. Provisions to be classified as Short Term Provisions & Long Term Provisions
1. Change in nomenclature – “Application Of Funds” has been replaced with “Assets”
2. Fixed Assets to be further classified as
4. Current Assets are to be shown under separate head.
5. “Sundry Debtors” have now been named “Trade Receivables”
6. “Cash and Bank Balances” have now been termed as “Cash and Cash Equivalents”. Classification under this head has been completely revamped.
7. Inventories – Goods in transit shall be disclosed under the relevant sub-head of inventories
8. Misc expenditure (to the extent not written off or adjusted) shall now not be shown separately under head “Other Current Assets”
9. The amount of dividend proposed to be distributed to shareholders (equity and preference) for the period and amount per share to be disclosed separately
Changes in Profit & Loss A/c
1. Under head “Other Income” – Net gain/loss on foreign currency translation and transaction (other than finance cost) shall be disclosed separately.
2. Employee benefit expense shall disclose additionally expense on account of Employee stock option scheme (ESOP)
3. Following shall now be disclosed separately –
• Provision for loss of Subsidiary companies
• Net loss on sale of Investments
• Details of exceptional and extraordinary items
• Prior Period items
• Adjustment to carrying amount of investments
4. A new format has been issued for face reporting of Profit & Loss A/c.
Impact of Revision in Schedule VI
1. The revised schedule VI intends to familiarize companies with Ind-AS/IFRS by using certain concepts such as current/non-current classification.
2. The revised Schedule VI has eliminated the concept of schedules and such information will now be provided in the notes to accounts. This is as done when applying IFRS.
3. From now on, the compliance requirements of Act and/or Accounting standards will prevail over schedule VI.
4. Better presentation, disclosure 1s intended to facilitate better organised data for users of financial statement.
|So here we go.. Download Revise Schedule VI with CFS and Notes to accounts|