25603 43182 revised schedule vi

8/12/2019 25603 43182 Revised Schedule Vi

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ACCOUNTING

THE CHARTERED ACCOUNTANT SEPTEMBER 201160

Financial Statement Presentation underRevised Schedule VI and the Existing

Schedule VI of the Companies Act

The revised Schedule VI, as notified by Government of India through its gazette dated 28 th February, 2011 is effectivefrom 01-04-2011 i.e. from FY 2011-2012 onwards. The revised Schedule VI format is applicable to companies bothcovered under IGAAP and Ind-AS (Converged IFRS). It has plethora of changes as compared to existing ones. Therevised Schedule VI, fairly to an extent is drafted in an IFRS-compliant manner. Both in revised as well as existingSchedule VI, extraordinary and exceptional items are to be disclosed separately on the face of profit and loss account.

But in IFRS there is nothing called as extraordinary and exceptional items. Though the revised Schedule VI is a betterand bold step for India Inc to have a feel of their financials in IFRS way, it is for the time to tell how far we haveachieved the objective. Read on to know more…

Introduction

The revised Schedule VI, fairly to

an extent is drafted in an IFRS-compliant manner. The paradigm

shift between the revised Schedule

VI and the existing Schedule

VI is the Current, Non-currentform of classication of Assets

CA. Shriram Krishnamurthy

(The author is a member of the Institute. Hecan be reached at [email protected])

and Liabilities, which India Inc.must get used to. An Asset or

Liabilities shall be classied as

Current or Non-current based on

its operating cycle. Where the

normal operating cycle cannot

be identied, it is assumed as12 months.

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ACCOUNTING

THE CHARTERED ACCOUNTANT SEPTEMBER 2011 61

Differences Between Revised Schedule VI and the Existing Schedule VI

Area of Differences Revised Schedule VI Existing Schedule VI

Balance Sheet - Liabilities

Share Capital Reconciliation of number of sharesissued at the beginning and atthe end of reporting periods isrequired.

There is no such requirement.

Rights, preferences and restrictionson each class of shares includingrestrictions on the distribution ofdividends and the repayment ofcapital to be disclosed.

Option on un-issued share capitalto be specied.

Disclosure of shares held by eachshareholder holding more than 5%shares specifying the number of

shares held.


Disclosure of following detailsrequired for ve years:i. Aggregate number and class of

shares allotted as fully paid uppursuant to contracts withoutpayment being received incash.

ii. Aggregate number and class ofshares allotted as fully paid upby way of bonus shares.

iii. Aggregate number and class of

shares bought back.

Disclosure of details for point no. iand ii are required but not limitedto ve years. The Existing ScheduleVI also requires disclosure ofthe source of bonus share issuewhich is not emphasised in revisedSchedule VI.

Share Application Money Pending Allotment

Application Money received forallotment and due for refundand interest accrued thereonis disclosed as Other currentliabilities. Share application moneynot exceeding issued capital and tothe extent non-refundable shall beshown as Equity.

Disclosed as part of Shareholders’Fund.

Detailed disclosure as regardsto number of shares issued, theamount of premium, etc. shall be

disclosed.


Reserves and Surplus Debit balance of Prot and Lossaccount shall be shown as anegative gure under the head“surplus”. The balance shall beshown in Reserves and Surpluseven if it is negative after theadjustment.

Debit balance in Prot and Lossaccount is shown on the asset sideif negative or as a deduction fromuncommitted reserves, if any.

Surplus (i.e.) balance in Protand Loss account shall discloseallocations and appropriationssuch as dividend and transfer to/from reserves.

Allocations and appropriations suchas dividend and transfer to generalreserves are shown ‘below the line’in Prot and Loss account.

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ACCOUNTING



Loan Funds Loans are sub-classied into Long-term and Short-term borrowings andfurther to Secured and Unsecuredportion.

Loans are sub-classied intoSecured and Unsecured portion.Interest accrued and due on loansis shown as part of the loans.

Loans and Advances from relatedparties are to be shown separately.

Loans and Advances fromsubsidiaries are to be shownseparately.

Loans guaranteed by directors andothers shall be disclosed.

Loans guaranteed by directors andmangers shall be disclosed. Also,loan from directors and managersshall be shown separately.

Period and amount of continuingdefault as on the balance sheet datein repayment of loans and interest

shall be specied separately.

There is no such requirement inSchedule VI. CARO requires suchdisclosures.

Other Liabilities and Provisions Classied into Other Long-TermLiabilities, Long-Term Provisions,Other Current Liabilities and Short-Term Provisions.

Classied into Current Liabilitiesand Provisions.

‘Trade payables’ - This wouldcover amounts payable in respectof goods purchased or servicesreceived in the normal course ofbusiness. No further classicationinto MSME and non-MSME dues.

No such specic requirements.Sundry creditors dues are classiedin to MSME and non-MSME withdetailed disclosures about amountoutstanding, interest paid, interestaccrued but not paid, etc.

Interest accrued and due & Interestaccrued but not due on loans isshown as Other current liabilities.

Interest accrued but not due onloans is shown as current liabilities.

The amount of dividend proposedto be distributed to equity andpreference shareholders for theperiod and the related amountper share shall be disclosedseparately.



Balance Sheet – AssetsFixed Assets Classied into Tangible and

Intangible assets separately. All Tangible and Intangible assetsare shown as xed assets.

Investments Investments are classied into Non-current and Current investments.Under each classication, detailsshall be given of the name ofbody corporate viz. subsidiaries,associates, joint ventures, controlledspecial purpose entities separately.

Investments are classied into Long-Term and Current investments.Investment in shares, debenturesand bonds of subsidiary company/bodies corporate under samemanagement shall be disclosedseparately.

There is no such requirement. Details of investments purchasedand sold within the reporting periodis required to be given.

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ACCOUNTING

THE CHARTERED ACCOUNTANT SEPTEMBER 2011 63


Other Assets, Loans and Advances Classied into Long-Term Loansand Advances, Other Non-Current Assets, Inventories, TradeReceivables, Cash and CashEquivalents, Short-Term Loans& Advances and Other Current Assets.

Classied into Current Assets,Loans and Advances.

Debts due by directors or otherofcers of the company or any ofthem severally or jointly and dueby rm or private company wheredirector is a partner or directoror member should be separatelysated in all cases.

Apart from revised ScheduleVI norms. Debts due fromother companies under samemanagement and the maximumamount due by directors or otherofcers of the company at any timeduring the year shall be disclosed.

Capital Advances are to bedisclosed under Long-term loansand advances.

Disclosed as part of Capital work-in-progress or Fixed assets.

No separate disclosure for bankbalance lying with Scheduled, Non-Scheduled banks and maximumamount outstanding.

Separate disclosure for bankbalance lying with Scheduledbanks, Non-Scheduled banks andmaximum amount outstanding.

There is no such requirement. Bank balances - Nature of interest,if any, of any director or his relativeother than in scheduled banks shallbe disclosed.

Repatriation restrictions, if any, inrespect of cash and bank balancesshall be separately stated.


Bank Deposits with more than 12months maturity shall be disclosedseparately.


Loans and advances to relatedparties giving the details thereofshall be disclosed separately.

Loans and advances to subsidiariesand to partnership rms in which anyof the company or its subsidiariesis a partner shall be disclosedseparately.


Proft and Loss Account

Materiality Any item of income or expenditurewhich exceeds 1% of revenue fromoperations or R100,000, whicheveris higher shall be disclosedseparately.

Any item of expense which exceeds1% of total revenue or R5,000,whichever is higher shall be disclosedseparately and not clubbed withMiscellaneous expenses.

Managerial Remuneration No separate disclosure of amountpaid to Managing Directors orManagers is required.

Separate and detailed disclosure ofamount paid to Managing Directorsor Managers is required.

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Employee benet Expense Information about expense onEmployee Stock Option Scheme(ESOP) and Employee Stock

Purchase Plan (ESPP) to bedisclosed.

There is no such specicrequirement.

Manufacturing and TradingCompanies

In case of manufacturing andTrading companies, following to bedisclosed:i) Raw material under broad

heads.ii) Goods purchased under broad

heads.iii) Goods traded by company

under broad heads.

Information about licensed, installed

capacity and actual production formanufacturing companies need notbe disclosed.

In case of manufacturing companies,raw material consumed, givingitem-wise break-up and indicatingquantities thereof. Opening andclosing stock of goods produced,giving break-up of each class ofgoods and indicating the quantitiesthereof. All raw materials whichaccount for 10% or more rawmaterials consumed shall bedisclosed separately. In case of

trading companies, the purchases,opening and closing stocks, givingbreak-up of each class of goodstraded and the quantities thereof tobe disclosed. The information aboutlicensed, installed capacity andactual production for manufacturingcompanies to be disclosed by wayof note.

Tax Deducted at Source (TDS) There is no such specicrequirement.

Information about TDS on operatingincome, interest income, etc. if any,to be disclosed.

Units of Measurement of Financial Statements

Turnover less than 100 crore – To thenearest hundreds, thousands, lakhor millions, or decimals thereof.Turnover more than or equal to 100crore – To the nearest lakh, millions,or crore, or decimals thereof.Once, unit of measurement is used,it should be uniformly used in thenancial statements, explicitlystated.

Turnover less than 100 crore – To thenearest hundreds or thousands, ordecimals thereof.Turnover more 100 crore but lessthan 500 crore – To the nearesthundreds, thousands, lakh ormillions, or decimals thereof.Turnover more than 500 crore - Tothe nearest hundreds, thousands,lakh, millions or crores, or decimalsthereof.

Key Takeaways from Revised

Schedule VI• Information to be mandatorily

presented on the face of the

nancial statements limited only

to broad and signicant items –

details by way of notes.

• Part IV of the existing Schedule

VI (balance sheet abstract andcompany’s general business

prole) dispensed with.

• Revised Schedule VI provides

format of Prot and Loss

account including disclosure

of discontinuing operations has

been prescribed.• Schedules to balance sheet,

Prot and Loss account and

signicant accounting policiesshould be disclosed by way of

notes.

Conclusion

Though the revised Schedule VI is a

better and bold step for India Inc. to

have a feel of their nancials in IFRSway, it is for the time to tell how far

we have achieved the objective. n

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25603 43182 revised schedule vi

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