revised schedule vi
DESCRIPTION
TRANSCRIPT
Need & Importance
The main aim of Revised Schedule VI is to attain compatibility and convergence with IFRS in India.
To eliminate numerous statistical and disclosure requirement which are not relevant for investors.
The existing Schedule VI does not require companies to classify their assets and liabilities into current and non-current.
For ours perspective, ICAI has mandatory implemented Revised version in Nov 2012 exams and onwards.
Major Issues
Form of statement of P&L has been provided.
General Instructions•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 for all items shall also be disclosed•Minimum requirement for disclosure on face of statements.
•If Turnover :- < ` 100 crores = Figures to be in nearest hundreds, thousands, lakhs or millions or decimals thereof. > ` 100 crores = Figures to be in nearest lakhs or millions or decimals thereof.
Current/Non-Current Distinction An item is classified as current
if it is involved in the entity's operating cycle or
is expected to be realized/ settled within twelve months after reporting period or
If it is held primary for trading or Is cash or cash equivalent or If entity does not have unconditional right
to defer settlement of liability for atleast 12 months after reporting period.
Other assets and liabilities are non current
Balance Sheet : Equity/LiabilitiesParticulars Note
No.Figures at the end of current
reporting period
Figures at the end of
previous reporting
period
Shareholders’ Funds Share Capital Reserve & Surplus Money Reserved against share warrants
Share Application money pending Allotment
Non Current Liabilities Long Term Borrowings Deferred Tax Liabilities (Net) Other Long Term Liabilities Long Term Provisions
Current Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions
Key HighlightsThe amount of Shareholders’ Fund is to
shown after deduction of debit balance of P&L. As a result Shareholders’ Fund can be negative.
Separate head for “Miscellaneous Expenditure” has been discontinued.
Concept of operating cycle has been introduced
Current & Non-current classification of assets & liabilities on the lines of Ind AS & IFRS
Only Vertical Format
What's NewNew Line Items -
Liabilities:
Money received against Share Warrants
Trade PayablesShare Application
Money pending allotment
Separate headings for classifying Non current and Current Liabilities.
New Line Items - Assets:
Intangible Assets under development
Trade ReceivablesSeparate headings
for classifying Non current and Current Assets.
Cash and cash equivalents.
Share Capital 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;
The Rights, Preference & Restrictions attaching to each Class of Shares Shares in the company held by each shareholder holding more than 5 percent shares specifying the number of shares held; Reconciliation in number of Share
Details for 5 years (w/o cash, bonus, bought back)
Calls unpaid
Forfeited shares (amount originally paid up)
Reserves & Surplus 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 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’. So it must be shown under ‘Reserves and Surplus’ even if the resulting figure is in the negative.
Long Term & Short Term Borrowings Borrowings - Classification
Bonds/debentures Term loans from bank, other parties. Deposits Loans and advances from related parties. Long term maturities of finance lease obligation Other loans and advances. Sub- classification as as secured and unsecured, nature of security, guaranteed
by directors or others
Important Point
Convertible/Reedemable bonds/debentures (descending order)
Continuing default in repayment (period and amount, interest)
Terms of repayment of term loans and other loans
Long-term & Short-term Provisions
Other Long-term LiabilitiesThe amount shall be classified as :
Trade Payables and Others
The amount shall be classified as :
Provision for employee benefits
Others (Specify nature)
Removed specific mention of
Provision for taxationProposed DividendProvision for ContingenciesProvision for Provident Fund Schemes
Other Current LiabilitiesThe 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.(h) Unpaid matured deposits and interest accrued
thereon(i) Unpaid matured debentures and interest
accrued thereon(j) Other payables (specify nature);
Balance Sheet : AssetsParticulars Note
No.Figures at the end of current
reporting period
Figures at the end of
previous reporting
period
Non- Current Assets(a) Fixed Assets Tangible Assets Intangible Assets Capital Work in progress Intangible Assets under development(b) Non- Current Investments(c) Deferred Tax Assets (net)(d) Long Term Loans & Advances(e) Other Non-Current Assets
Current Assets (a) Current Investments (b) Inventories (c) Trade Receivables (d) Cash and Cash Equivalents (e) Short Term Loans and Advances (f) Other Current Assets
Fixed Assets Tangible AssetsLand, Building, Plant and Equipment, Furniture and
Fixtures, Vehicles, Office Equipments, Others
Asset under lease – shall be separately specified
Reconciliation of the gross and net carrying amounts at beginning and end of reporting period.
Details of reduction or increase - by way of reduction of capital or revaluation of assets etc., to be given by way of a note
Intangible AssetsGoodwill, Brands, Computer Software, etc. Reconciliation & detail same as above
Non-current & Current Investment Non-current/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 (i) subsidiaries, (ii) associates, or(iii) joint ventures
Investments carried at other than at cost should be separately stated specifying the basis for valuation thereof.
Non-current & Current Investment 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
Note :- Their is a conflict between classification of Investment into current/non-current under AS-13 and Revised Schedule, my view AS-13 to be follow.
Long-term Loans & AdvancesLong-term loans and advances shall be classified
as:(a) Capital Advances;(b) Security Deposits;(c) Loans and advances to related parties (giving
details thereof);(d) Other loans and advances (specify nature).Other Non-current Assets
Other Non-current assets shall be classified as:(a) Long-term trade Receivables. (b) Other (Specify nature)
Inventories(i) Inventories shall be classified as:
(a) Raw materials; (b) Work-in-progress;(c) Finished goods;(d) Stock-in-trade (in respect of goods acquired
for trading);(e) Stores and spares;(f) Loose tools;(g) Others (specify nature).
(ii) Goods-in-transit shall be disclosed under the relevant sub-head of inventories.
(iii) Mode of valuation shall be stated.
Cash and Cash Equivalents(i) Cash and cash equivalents shall be classified as:
(a) Balances with banks;(b) Cheques, drafts on hand;(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)
Trade Receivables Aggregate amount of Trade Receivables
outstanding for a period exceeding six months from the date they are due for payment should be separately stated.
Short-term Loans & Advance Classified as under : (a) Loans & advance to related party (b) Others (specify nature)
Other Current Assets It includes as under : Interest accrued Unbilled Revenue Recoverable from Govt. agencies
Important Points Important and common points for Long-
term/short-term loans & advance, other non-current assets, trade receivables.
(i) Every item under above head shall be separately sub-classified as:(a) Secured, considered good;(b) Unsecured, considered good;(c) Doubtful.
(ii) Allowance for bad and doubtful loans and advances shall be disclosed under the relevant heads separately.
(iii) Loans & advances or debt due by directors or other officer of company or by related firm/pvt co. shall be separately stated.
Contingent Liabilities and CommitmentsContingent Liabilities to be classified as under :Claims against company not acknowledge as debtsGuaranteesOther money for which company is contingent liable.Amount of dividends proposed to be disclosed
separately
Commitments to be classified as under :Uncalled liability on share and other partly paid
investmentOther Commitment (specify nature)
Particulars Note No.
Figures at the end of current
reporting period
Figures at the end of
previous reporting
period
Revenue from Operations
Other Income
Total Revenue ( I + II)
Expenses
Cost of Material ConsumedPurchases of Stock in TradeChanges in inventories of finished goodsWork in progress and stock in trade
Employee Benefit expenseFinance CostsDepreciation and amortization expenseOther expenses
Profit Before Exceptional and extraordinary items and tax
Exceptional Items
Part – II : Statement of Profit & Loss
Particulars Note No.
Figures at the end of current
reporting period
Figures at the end of
previous reporting
period
Profit Before extraordinary items and tax
Extraordinary Items
Profit Before Tax
Tax Expense Current Tax Deferred Tax
Profit (loss) for the period from continuing operations
Profit (loss) from discontinuing operations
Tax expense of discontinuing operations
Profit(loss) from discontinuing operations (after tax)
Profit (loss) for the period
Earnings per equity shareBasicDiluted
Part – II : Statement of Profit & Loss
Key Highlights
Format of P&L has been prescribed.Only Vertical Format.Classification of expenses by nature needs to be
given.P&L from discontinuing operations and tax expenses
for the same need to be shown separately on the face of P&L statement.
Quantitative disclosure, detail of managerial remuneration dispensed with.
Separate disclosure for any item of income or expenses which exceeds 1 % of revenue or ` 1,00,000, we higher
General Instructions for Preparation P&L Now known as ‘Profit and Loss Statement for the year
ended ________’. 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.
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,”.
BibliographyInformation is taken from different source like :
A Hand Book on XBRL & Revised Schedule by CCH Publishers
An Accounting Update issued by KPMG
Guidance Note on Revised Schedule by ICAI
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Presented By - HIREN BHANDARI