disclosure requirements for revised schedule vi
DESCRIPTION
DMKH & CO. Disclosure Requirements for Revised Schedule VI. MALAD GOREGAON CPE STUDY CIRCLE. CA. Durgesh Kabra DMKH & Co., Chartered Accountants Mumbai. DMKH & CO. Contents. Introduction Object Methodology adopted in determining the Financial Statement. General instructions - PowerPoint PPT PresentationTRANSCRIPT
Schedule VI (Revised- 2011)DMKH & CO.
1
Contents
General instructions
Performa of Statement of Profit & loss
General instructions for preparation of statement of profit & loss.
Comparison between Old & Revised Schedule VI
DMKH & CO.
3
Schedule VI of the Companies Act, 1956, prescribes the format of financial statements and disclosure requirements for corporate entities in India.
Considering the economic and regulatory changes that have taken place globally, and being as old as the Act itself (1956), schedule VI had completely outlived its utility.
As per notification dated 28th March, 2011 by Ministry of Corporate Affairs the revised Schedule VI is applicable to balance sheet & profit & loss account to be prepared for the financial year commencing on or from 01st April 2011.
DMKH & CO.
4
One of the Main aim of revising schedule VI was to attain compatibility and convergence with IFRS in India. …why?
In may 2008, MCA issued a press release in which it has committed to convergence with IFRS by April 1, 2011
At the G20 summit on financial Market and World Economy, then Finance Minister also committed to have convergence with IFRS in India
Other main object of revising schedule VI was to eliminate numerous statistical and disclosure requirements which are not relevant from an investor perspective.
DMKH & CO.
Requirements of the Act and/or Standards will override the related
requirement of Schedule VI.
DMKH & CO.
General instructions
Disclosures are required by the Companies Act shall be made in the notes to accounts
Additional disclosures specified in the Accounting Standards shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of Financial Statements.
28th August, 2011
Revised Schedule VI
6
Notes to the accounts shall contain information in addition to that presented in the Financial Statement and shall provide where required
(a) narrative descriptions or disaggregations of the items recognized in those statements
and
(b) information about items that do not qualify for recognition in those statements.
DMKH & CO.
General instructions
7
Each item on the face of the Balance sheet and statement of the profit and loss shall be cross- referenced to any related information in the notes to the accounts
Figures of previous period:
The corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given.
Confusion between comparative figures and corresponding figures
DMKH & CO.
General instructions
Where Turnover:
< Rs. 100 crores = Figures to be in nearest hundreds, thousands, lakhs or millions or decimals thereof.
> Rs. 100 crores = Figures to be in nearest lakhs or millions or decimals thereof.
Once a unit of measurement is used, it should be used uniformly in the Financial Statements
DMKH & CO.
General instructions
28th August, 2011
Revised Schedule VI
(Rupees in…………)
Particulars Note No. Figures as at the Figures as at the
end of the end of the
current reporting previous reporting
(2)Share application money pending allotment
(3)Non-current liabilities
(d) Long-term provisions
28th August, 2011
Revised Schedule VI
(e) Other non-current assets
(f) Other current assets
DMKH & CO.
28th August, 2011
Revised Schedule VI
28th August, 2011
Revised Schedule VI
12
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 criteria SPECIFIED FOR ASSETS & all other liabilities shall be classified as non-current.
DMKH & CO.
28th August, 2011
Revised Schedule VI
13
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.
DMKH & CO.
Trade Payables
Separate headings for classifying Non current and Current Liabilities.
General Instructions for Balance Sheet
New Line Items - Assets:
Intangible Assets under development
current and Current Assets.
Cash and cash equivalents.
15
Shares in respect of each class in the company held by
a) its holding company
b) its ultimate holding company including shares held by or by subsidiaries
c) associates of the holding company or the ultimate holding company in aggregate;
DMKH & CO.
Shares in the company held by each shareholder holding more than 5
percent shares specifying the number of shares held;
The Rights, Preference & Restrictions attaching to each Class of Shares
15
16
Surplus i.e. balance in Statement of Profit & Loss disclosing allocations and appropriations such as dividend, bonus shares and transfer to/from reserves etc. (Additions and deductions since last balance sheet to be shown under each of the specified heads)
DMKH & CO.
A reserve specifically represented by earmarked investments shall be termed as a ‘fund’.
Debit balance of statement of profit and loss shall be shown as a negative figure under the head ‘Surplus’. 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.
16
Loans and advances from related parties.
Period and amount of continuing default as on the balance sheet
date in repayment of loans and interest, shall be specified separately
in each case.
28th August, 2011
Revised Schedule VI
Provision for employee benefits.
(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.
(h) Unpaid matured deposits and interest accrued thereon
(i) Unpaid matured debentures and interest accrued thereon
(j) Other payables (specify nature);
DMKH & CO.
Movement between opening & closing balances to be given
Details of reduction – by way of reduction of capital, revaluation etc. to be given by way of a note
Assets under lease shall be separately specified under each class of asset.
DMKH & CO.
Non-current investments shall be classified as trade investments and other investments and it includes Investment property;
Under each classification, details of names of the bodies corporate (indicating separately whether such bodies are
subsidiaries,
associates,
joint ventures, or
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.
DMKH & CO.
DMKH & CO.
Investments carried at other than at cost should be separately stated specifying the basis for valuation thereof.
The following shall also be disclosed:
(a) Aggregate amount of quoted investments and market value thereof;
(b) Aggregate amount of unquoted investments;
(c) Aggregate provision for diminution in value of investments
22
(a) Capital Advances;
(b) Security Deposits;
(c) Loans and advances to related parties (giving details thereof);
(d) Other loans and advances (specify nature).
(ii) The above shall also be separately sub-classified as:
(a) Secured, considered good;
(b) Unsecured, considered good;
(c) Doubtful.
(iii) Allowance for bad and doubtful loans and advances shall be disclosed under the relevant heads separately.
DMKH & CO.
(a) Raw materials;
(e) Stores and spares;
(ii) Goods-in-transit shall be disclosed under the relevant sub-head of inventories.
(iii) Mode of valuation shall be stated.
DMKH & CO.
Trade Receivables
(i) Aggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment should be separately stated.
(ii) Trade receivables shall be sub-classified as:
(a)Secured, considered good;
(b)Unsecured considered good;
(c)Doubtful.
(iii) Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately.
DMKH & CO.
(a) Balances with banks;
(c) Cash on hand;
(d) Others (specify nature).
(ii) Earmarked balances with banks (for example, for unpaid dividend) shall be separately stated.
(iii) Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments shall be disclosed separately.
(iv) Bank deposits with more than 12 months maturity shall be disclosed separately. (from the date of deposit or as on March 31st 2011)
DMKH & CO.
DMKH & CO.
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.
27
DMKH & CO.
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.
(Rupees in…………)
current reporting current reporting
IV. Expenses:
Work-in-progress and Stock-in-Trade
Employee benefits expense
items tems and tax (III-IV)
VI. Exceptional items
(V - VI)
X. Tax expense:
(1) Current tax
(2) Deferred tax
30
XI Profit (Loss) for the period from continuing operations (VII-VIII)
XII Profit/(loss) from discontinuing operations
XII ITax expense of discontinuing operations
XIV Profit/(loss) from Discontinuing operations (after tax) (XII-XIII)
XV Profit (Loss) for the period (XI + XIV)
XVI Earnings per equity share:
(1) Basic
(2) Diluted
DMKH & CO.
28th August, 2011
Revised Schedule VI
General Instructions for Preparation P&L
Now known as ‘Profit and Loss Statement for the year ended ________’.
Format specified in new Schedule.
Exceptional and extraordinary items need to be disclosed separately on the face of the Statement of Profit and Loss. The details of the same as also of any prior period items should be disclosed in the notes.
Profit / loss before and after tax from discontinuing operations and the tax expense from discontinuing operations need to be disclosed separately on the face of the Statement of Profit and Loss.
32
General Instructions for Preparation P&L
Any item of income or expenditure which exceeds one percent of the revenue from operations or Rs. 1,00,000 whichever is higher should be disclosed separately.
Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements.
The items to be disclosed under Revenue from Operations have been specifically indicated for both finance companies and others.
Note:- Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements,”.
33
Sr. No.
Both horizontal and vertical form were allowed
Only vertical form of Balance Sheet has been specified in the revised Schedule VI
2)
No format specified for Profit and Loss Account
Form of Profit and Loss Account specified under Part II
3)
Profit and Loss Appropriation Account
Opening surplus, proposed dividend and transfer to/ from reserves were shown in Profit and Loss Appropriation Account
Transfer from/ to reserves to be shown under the heading Reserves & Surplus only. No requirement of separate Profit and Loss Appropriation Account.
DMKH & CO.
Rounding off of Figures appearing in financial statement
Turnover of less than Rs. 100 Crs - R/off to the nearest Hundreds, thousands or decimal thereof Turnover of Rs. 100 Crs or more but less than Rs. 500 Crs - R/off to the nearest Hundreds, thousands, lakhs or millions or decimal thereof Turnover of Rs. 500 Crs or more - R/off to the nearest Hundreds, thousands, lakhs, millions or crores, or decimal thereof
Turnover of less than Rs. 100 Crs - R/off to the nearest Hundreds, thousands, lakhs or millions or decimal thereof Turnover of Rs. 100 Crs or more - R/off to the nearest lakhs, millions or crores, or decimal thereof
Comparison… (ii)
DMKH & CO.
Net Working Capital
Current assets & Liabilities are shown together under application of funds. The net working capital appears on balance sheet.
Assets & Liabilities are to be bifurcated into current & Non-current & to be shown separately. Hence, net working capital will not be appearing in B/S.
6)
Fixed Assets
There was no bifurcation required in to tangible & intangible assets. Capital advances used to be shown under the Head Capital Work in Progress under Fixed Assets
Fixed assets to be shown under non-current assets and have to be bifurcated into Tangible & intangible assets. Capital advances to be shown under the head ‘Long term Loans & Advances’
Comparison… (iii)
DMKH & CO.
7)
Borrowings
Short term & long term borrowings are grouped together under the head Loan funds sub-head Secured / Unsecured
Long term borrowings to be shown under non-current liabilities and short term borrowings to be shown under current liabilities with separate disclosure of secured / unsecured loans. Period and amount of continuing default as on the balance sheet date in repayment of loans and interest to be separately specified
8)
Deposits
Lease deposits are part of loans & advances
Lease deposits to be disclosed as long term loans & advances under the head non-current assets
Comparison… (iv)
DMKH & CO.
9)
Investments
Both current & non-current investments to be disclosed under the head investments
Current and non-current investments are to be disclosed separately under current assets & non-current assets respectively.
10)
Loans & Advances
Loans & Advance are disclosed along with current assets Loans & Advance to subsidiaries & others to be disclosed separately.
Loans & Advances to be broken up in long term & short term and to be disclosed under non-current & current assets respectively. Loans & Advance from related parties & others to be disclosed separately.
11)
Deferred Tax assets / liabilities to be disclosed under non-current assets / liabilities as the case may be.
Comparison… (v)
DMKH & CO.
Bank balance to be bifurcated in scheduled banks & others
No such bifurcation required. Bank balances in relation to earmarked balances, held as margin money against borrowings, deposits with more than 12 months maturity, each of these to be shown separately.
13)
Profit & Loss (Debit Balance)
P&L debit balance to be separately disclosed in the Balance Sheet.
Debit balance of Profit and Loss Account to be shown as negative figure under the head Surplus. Therefore, Reserve & Surplus can have a negative balance.
Comparison… (vi)
DMKH & CO.
Sundry Debtors
Debtors outstanding for more than six months from invoice date to be shown separately
Debtors outstanding for more than six months from the date they became due to be shown separately
15)
Other current liabilities
No specific mention for separate disclosure of Current maturities of long term debt No specific mention for separate disclosure of Current maturities of finance lease obligation
Current maturities of long term debt to be disclosed under other current liabilities. Current maturities of finance lease obligation to be disclosed.
Comparison… (vii)
DMKH & CO.
Separate line item Disclosure criteria
any item under which expense exceeds one per cent of the total revenue of the company or Rs. 5,000 which ever is higher; shall be disclosed separately
any item of income / expense which exceeds one per cent of the revenue from operations or Rs. 1,00,000, which ever is higher; to be disclosed separately
17)
Function wise & nature wise
Expenses in Statement of Profit and Loss to be classified based on nature of expenses
18)
Finance cost to be classified in fixed loans & other loans
Finance cost shall be classified as interest expense, other borrowing costs & Gain / Loss on foreign currency transaction & translation
Comparison… (viii)
DMKH & CO.
Foreign exchange gain / loss
Gain / Loss on foreign currency transaction to be shown under finance cost
Gain / Loss on foreign currency transaction to be separated into finance costs and other expenses
20)
Purchases
The purchase made and the opening & closing stock, giving break up in respect of each class of goods traded in by the company and indicating the quantities thereof.
Goods traded in by the company to be disclosed in broad heads in notes. Disclosure of quantitative details of goods is diluted. Goods-in-transit to be separately disclosed.
Comparison… (ix)
DMKH & CO.
TDS amount on Interest, royalty received
TDS amount was required to be shown for Interest income etc.
No requirement of disclosing TDS amounts separately
22)
Managerial Remuneration and Commission
Payment to directors and detailed calculation under section 198 was required to be disclosed
No disclosure requirements for Managerial Remuneration
23)
ESOP expenses
No requirement to show separately as part of Employee Benefits expense
Expense on Employee Stock Option Scheme (ESOP) and Employee Stock Purchase Plan (ESPP) to be shown separately as part of Employee Benefits expense
Comparison… (x)
DMKH & CO.
Terms provision, reserve, capital reserve , quoted investment etc. were defined
No such specific definitions.
Details of company registration number, capital raised, Balance Sheet details, products etc. were required to be attached with financials
No such requirement.
1
Contents
General instructions
Performa of Statement of Profit & loss
General instructions for preparation of statement of profit & loss.
Comparison between Old & Revised Schedule VI
DMKH & CO.
3
Schedule VI of the Companies Act, 1956, prescribes the format of financial statements and disclosure requirements for corporate entities in India.
Considering the economic and regulatory changes that have taken place globally, and being as old as the Act itself (1956), schedule VI had completely outlived its utility.
As per notification dated 28th March, 2011 by Ministry of Corporate Affairs the revised Schedule VI is applicable to balance sheet & profit & loss account to be prepared for the financial year commencing on or from 01st April 2011.
DMKH & CO.
4
One of the Main aim of revising schedule VI was to attain compatibility and convergence with IFRS in India. …why?
In may 2008, MCA issued a press release in which it has committed to convergence with IFRS by April 1, 2011
At the G20 summit on financial Market and World Economy, then Finance Minister also committed to have convergence with IFRS in India
Other main object of revising schedule VI was to eliminate numerous statistical and disclosure requirements which are not relevant from an investor perspective.
DMKH & CO.
Requirements of the Act and/or Standards will override the related
requirement of Schedule VI.
DMKH & CO.
General instructions
Disclosures are required by the Companies Act shall be made in the notes to accounts
Additional disclosures specified in the Accounting Standards shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of Financial Statements.
28th August, 2011
Revised Schedule VI
6
Notes to the accounts shall contain information in addition to that presented in the Financial Statement and shall provide where required
(a) narrative descriptions or disaggregations of the items recognized in those statements
and
(b) information about items that do not qualify for recognition in those statements.
DMKH & CO.
General instructions
7
Each item on the face of the Balance sheet and statement of the profit and loss shall be cross- referenced to any related information in the notes to the accounts
Figures of previous period:
The corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given.
Confusion between comparative figures and corresponding figures
DMKH & CO.
General instructions
Where Turnover:
< Rs. 100 crores = Figures to be in nearest hundreds, thousands, lakhs or millions or decimals thereof.
> Rs. 100 crores = Figures to be in nearest lakhs or millions or decimals thereof.
Once a unit of measurement is used, it should be used uniformly in the Financial Statements
DMKH & CO.
General instructions
28th August, 2011
Revised Schedule VI
(Rupees in…………)
Particulars Note No. Figures as at the Figures as at the
end of the end of the
current reporting previous reporting
(2)Share application money pending allotment
(3)Non-current liabilities
(d) Long-term provisions
28th August, 2011
Revised Schedule VI
(e) Other non-current assets
(f) Other current assets
DMKH & CO.
28th August, 2011
Revised Schedule VI
28th August, 2011
Revised Schedule VI
12
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 criteria SPECIFIED FOR ASSETS & all other liabilities shall be classified as non-current.
DMKH & CO.
28th August, 2011
Revised Schedule VI
13
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.
DMKH & CO.
Trade Payables
Separate headings for classifying Non current and Current Liabilities.
General Instructions for Balance Sheet
New Line Items - Assets:
Intangible Assets under development
current and Current Assets.
Cash and cash equivalents.
15
Shares in respect of each class in the company held by
a) its holding company
b) its ultimate holding company including shares held by or by subsidiaries
c) associates of the holding company or the ultimate holding company in aggregate;
DMKH & CO.
Shares in the company held by each shareholder holding more than 5
percent shares specifying the number of shares held;
The Rights, Preference & Restrictions attaching to each Class of Shares
15
16
Surplus i.e. balance in Statement of Profit & Loss disclosing allocations and appropriations such as dividend, bonus shares and transfer to/from reserves etc. (Additions and deductions since last balance sheet to be shown under each of the specified heads)
DMKH & CO.
A reserve specifically represented by earmarked investments shall be termed as a ‘fund’.
Debit balance of statement of profit and loss shall be shown as a negative figure under the head ‘Surplus’. 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.
16
Loans and advances from related parties.
Period and amount of continuing default as on the balance sheet
date in repayment of loans and interest, shall be specified separately
in each case.
28th August, 2011
Revised Schedule VI
Provision for employee benefits.
(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.
(h) Unpaid matured deposits and interest accrued thereon
(i) Unpaid matured debentures and interest accrued thereon
(j) Other payables (specify nature);
DMKH & CO.
Movement between opening & closing balances to be given
Details of reduction – by way of reduction of capital, revaluation etc. to be given by way of a note
Assets under lease shall be separately specified under each class of asset.
DMKH & CO.
Non-current investments shall be classified as trade investments and other investments and it includes Investment property;
Under each classification, details of names of the bodies corporate (indicating separately whether such bodies are
subsidiaries,
associates,
joint ventures, or
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.
DMKH & CO.
DMKH & CO.
Investments carried at other than at cost should be separately stated specifying the basis for valuation thereof.
The following shall also be disclosed:
(a) Aggregate amount of quoted investments and market value thereof;
(b) Aggregate amount of unquoted investments;
(c) Aggregate provision for diminution in value of investments
22
(a) Capital Advances;
(b) Security Deposits;
(c) Loans and advances to related parties (giving details thereof);
(d) Other loans and advances (specify nature).
(ii) The above shall also be separately sub-classified as:
(a) Secured, considered good;
(b) Unsecured, considered good;
(c) Doubtful.
(iii) Allowance for bad and doubtful loans and advances shall be disclosed under the relevant heads separately.
DMKH & CO.
(a) Raw materials;
(e) Stores and spares;
(ii) Goods-in-transit shall be disclosed under the relevant sub-head of inventories.
(iii) Mode of valuation shall be stated.
DMKH & CO.
Trade Receivables
(i) Aggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment should be separately stated.
(ii) Trade receivables shall be sub-classified as:
(a)Secured, considered good;
(b)Unsecured considered good;
(c)Doubtful.
(iii) Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately.
DMKH & CO.
(a) Balances with banks;
(c) Cash on hand;
(d) Others (specify nature).
(ii) Earmarked balances with banks (for example, for unpaid dividend) shall be separately stated.
(iii) Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments shall be disclosed separately.
(iv) Bank deposits with more than 12 months maturity shall be disclosed separately. (from the date of deposit or as on March 31st 2011)
DMKH & CO.
DMKH & CO.
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.
27
DMKH & CO.
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.
(Rupees in…………)
current reporting current reporting
IV. Expenses:
Work-in-progress and Stock-in-Trade
Employee benefits expense
items tems and tax (III-IV)
VI. Exceptional items
(V - VI)
X. Tax expense:
(1) Current tax
(2) Deferred tax
30
XI Profit (Loss) for the period from continuing operations (VII-VIII)
XII Profit/(loss) from discontinuing operations
XII ITax expense of discontinuing operations
XIV Profit/(loss) from Discontinuing operations (after tax) (XII-XIII)
XV Profit (Loss) for the period (XI + XIV)
XVI Earnings per equity share:
(1) Basic
(2) Diluted
DMKH & CO.
28th August, 2011
Revised Schedule VI
General Instructions for Preparation P&L
Now known as ‘Profit and Loss Statement for the year ended ________’.
Format specified in new Schedule.
Exceptional and extraordinary items need to be disclosed separately on the face of the Statement of Profit and Loss. The details of the same as also of any prior period items should be disclosed in the notes.
Profit / loss before and after tax from discontinuing operations and the tax expense from discontinuing operations need to be disclosed separately on the face of the Statement of Profit and Loss.
32
General Instructions for Preparation P&L
Any item of income or expenditure which exceeds one percent of the revenue from operations or Rs. 1,00,000 whichever is higher should be disclosed separately.
Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements.
The items to be disclosed under Revenue from Operations have been specifically indicated for both finance companies and others.
Note:- Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements,”.
33
Sr. No.
Both horizontal and vertical form were allowed
Only vertical form of Balance Sheet has been specified in the revised Schedule VI
2)
No format specified for Profit and Loss Account
Form of Profit and Loss Account specified under Part II
3)
Profit and Loss Appropriation Account
Opening surplus, proposed dividend and transfer to/ from reserves were shown in Profit and Loss Appropriation Account
Transfer from/ to reserves to be shown under the heading Reserves & Surplus only. No requirement of separate Profit and Loss Appropriation Account.
DMKH & CO.
Rounding off of Figures appearing in financial statement
Turnover of less than Rs. 100 Crs - R/off to the nearest Hundreds, thousands or decimal thereof Turnover of Rs. 100 Crs or more but less than Rs. 500 Crs - R/off to the nearest Hundreds, thousands, lakhs or millions or decimal thereof Turnover of Rs. 500 Crs or more - R/off to the nearest Hundreds, thousands, lakhs, millions or crores, or decimal thereof
Turnover of less than Rs. 100 Crs - R/off to the nearest Hundreds, thousands, lakhs or millions or decimal thereof Turnover of Rs. 100 Crs or more - R/off to the nearest lakhs, millions or crores, or decimal thereof
Comparison… (ii)
DMKH & CO.
Net Working Capital
Current assets & Liabilities are shown together under application of funds. The net working capital appears on balance sheet.
Assets & Liabilities are to be bifurcated into current & Non-current & to be shown separately. Hence, net working capital will not be appearing in B/S.
6)
Fixed Assets
There was no bifurcation required in to tangible & intangible assets. Capital advances used to be shown under the Head Capital Work in Progress under Fixed Assets
Fixed assets to be shown under non-current assets and have to be bifurcated into Tangible & intangible assets. Capital advances to be shown under the head ‘Long term Loans & Advances’
Comparison… (iii)
DMKH & CO.
7)
Borrowings
Short term & long term borrowings are grouped together under the head Loan funds sub-head Secured / Unsecured
Long term borrowings to be shown under non-current liabilities and short term borrowings to be shown under current liabilities with separate disclosure of secured / unsecured loans. Period and amount of continuing default as on the balance sheet date in repayment of loans and interest to be separately specified
8)
Deposits
Lease deposits are part of loans & advances
Lease deposits to be disclosed as long term loans & advances under the head non-current assets
Comparison… (iv)
DMKH & CO.
9)
Investments
Both current & non-current investments to be disclosed under the head investments
Current and non-current investments are to be disclosed separately under current assets & non-current assets respectively.
10)
Loans & Advances
Loans & Advance are disclosed along with current assets Loans & Advance to subsidiaries & others to be disclosed separately.
Loans & Advances to be broken up in long term & short term and to be disclosed under non-current & current assets respectively. Loans & Advance from related parties & others to be disclosed separately.
11)
Deferred Tax assets / liabilities to be disclosed under non-current assets / liabilities as the case may be.
Comparison… (v)
DMKH & CO.
Bank balance to be bifurcated in scheduled banks & others
No such bifurcation required. Bank balances in relation to earmarked balances, held as margin money against borrowings, deposits with more than 12 months maturity, each of these to be shown separately.
13)
Profit & Loss (Debit Balance)
P&L debit balance to be separately disclosed in the Balance Sheet.
Debit balance of Profit and Loss Account to be shown as negative figure under the head Surplus. Therefore, Reserve & Surplus can have a negative balance.
Comparison… (vi)
DMKH & CO.
Sundry Debtors
Debtors outstanding for more than six months from invoice date to be shown separately
Debtors outstanding for more than six months from the date they became due to be shown separately
15)
Other current liabilities
No specific mention for separate disclosure of Current maturities of long term debt No specific mention for separate disclosure of Current maturities of finance lease obligation
Current maturities of long term debt to be disclosed under other current liabilities. Current maturities of finance lease obligation to be disclosed.
Comparison… (vii)
DMKH & CO.
Separate line item Disclosure criteria
any item under which expense exceeds one per cent of the total revenue of the company or Rs. 5,000 which ever is higher; shall be disclosed separately
any item of income / expense which exceeds one per cent of the revenue from operations or Rs. 1,00,000, which ever is higher; to be disclosed separately
17)
Function wise & nature wise
Expenses in Statement of Profit and Loss to be classified based on nature of expenses
18)
Finance cost to be classified in fixed loans & other loans
Finance cost shall be classified as interest expense, other borrowing costs & Gain / Loss on foreign currency transaction & translation
Comparison… (viii)
DMKH & CO.
Foreign exchange gain / loss
Gain / Loss on foreign currency transaction to be shown under finance cost
Gain / Loss on foreign currency transaction to be separated into finance costs and other expenses
20)
Purchases
The purchase made and the opening & closing stock, giving break up in respect of each class of goods traded in by the company and indicating the quantities thereof.
Goods traded in by the company to be disclosed in broad heads in notes. Disclosure of quantitative details of goods is diluted. Goods-in-transit to be separately disclosed.
Comparison… (ix)
DMKH & CO.
TDS amount on Interest, royalty received
TDS amount was required to be shown for Interest income etc.
No requirement of disclosing TDS amounts separately
22)
Managerial Remuneration and Commission
Payment to directors and detailed calculation under section 198 was required to be disclosed
No disclosure requirements for Managerial Remuneration
23)
ESOP expenses
No requirement to show separately as part of Employee Benefits expense
Expense on Employee Stock Option Scheme (ESOP) and Employee Stock Purchase Plan (ESPP) to be shown separately as part of Employee Benefits expense
Comparison… (x)
DMKH & CO.
Terms provision, reserve, capital reserve , quoted investment etc. were defined
No such specific definitions.
Details of company registration number, capital raised, Balance Sheet details, products etc. were required to be attached with financials
No such requirement.