Presentation on theme: "The Revised Schedule VI To The Companies Act, 1956 CA ANIL MOOKIM D H A N B A D."— Presentation transcript:
The Revised Schedule VI To The Companies Act, 1956 CA ANIL MOOKIM D H A N B A D
POINT OF DISCUSSION Pre-revised schedule VI to The Co. Act,1956 Revised schedule VI to The Co. Act,1956-- main priciples changes in Balance Sheet & Profit & Loss Format of B/S – P/L with itemwise discussion Question/Answers.
WHY REVISED SCHEDULE VI ? Financial statements of indian corporate comparable with international format. To facilitate a fair portroyal of the financial and liquidity position of the company to the readers of the F/statements. Harmonising and synchronising with notified accounting standards Revise in terms of contents, format and to alignment with AS. Applicable to all co. financial statements prepared for F.Y commencing on or after 01/04/2011. Applies to all companies following indian GAAP until required to follow IFRS.
preceding period information Immediately preceding period information in financial statement with notes to a/c mandatory. applicable from the 1 st year of revised schedule vi. Exemption : in the case of 1 st year financial statements after incorporation.
DO NOT APPLY TO…. Insurance companies Banking companies Any other class of companies to which separate form of balance sheet and profit and loss account has been specified. APPLY TO ELECTRICITY CO. As because neither the Electricity Act 2003 nor the rules framed thereunder prescribe any format applicable to Interim financial statement also.
MAIN PRINCIPLES Compliance with the requirements of the act and/or the notified acounting standards will prevail over the schedule Disclosure on the face of the finacial statements or in the notes are minimum. Eliminated the concept of “SCHEDULE” and such information is now to be furnished in the notes to Accounts The term used in the revised schedule vi will carry the same meaning as defined by the applicable accounting standards
CONTINUE…. A balance will have to be maintained between providing excessive detail and not providing important information All items of assets and liablities are to be bifurcated between current and non current portions. To use the same unit of measurement uniformally through out the financial statements and notes thereon
CHANGES RELATED TO BALANCE SHEET Prescribes only the vertical format for presentation of financial statements Assets and liabilities are to be segregated into current and non-current portions Shareholders holding more than 5 % shares needs to be disclosed Aggregate number and class of shares allotted for consideration other than cash, bonus shares and shares brought back will need to be disclosed Any debit balance in the P/L account will be disclosed under the head “Reserve and Surplus” 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 Excess amount of subscription will be shown under “other current liabilities”
CONTINUE… Sundry Debtors replaced by the term “Trade Receivables” defined as dues arising from goods sold or services rendered in the normal course of business. Separate disclosures of the trade receivables outstanding for a period exceeding six months from the date bill is due for payment. Earlier from the date bill was raised. Capital advances are required to be presented under the head “Loans and Advances” Tangible assets under lease are required to be separately specified under each class of asset Capital commitments and other commitments are required to be disclosed. Earlier only capital commitments was required. Disclosure of all defaults in repayment of loans and interest now mandatory. Earlier no disclosure was required in F/statement except was to be reported under CARO 2003.
OTHER ADDITIONAL DISCLOSURES Rights, preferences and restrictions to each class of shares Terms of repayment of long term loans In each class of investment, details regarding names of bodies corporate, indicating bodies are subsidiaries, associates, joint ventures or controlled special purpose entities. Provision for diminution in the value of investments. Stock in trade held for trading purposes, separately from other finished goods.
CHANGES RELATING TO PROFIT AND LOSS ACCOUNT The name has been changed to “STATEMENT OF PROFIT AND LOSS” Statement of profit does not mention any appropriation items on its face Any items of income or expense which exceeds 1% of the revenue from the operation or Rs 100000, whichever is higher, needs to be disclosed separately (earlier 1% of total revenue or 5000/-) As per AS-9 Revenue Recognition, dividends should be recognised as income only when the rights to receive dividends is estlablished as on the balance sheet date Companies other than finance companies, revenue from operations need to be disclosed separately as revenue from sale of products, sale of services, and another operating revenues Interest cost needs to be disclosed separately as finance cost.
Schedule No. changed to Note No. Rounding off not compulsory. Option to present figures in lakhs, millions, crores which did not exist earlier.
DISCLOSURES NO LONGER REQUIRED Managerial remuneration and computation of net profits for calculation of commission. Quantitative information relating to turnover, raw material & purchases Information relating to licenced/installed capacity and actual production. Investments purchased and sold during the year. Investment, s/debtors and loans & advances from co. under the same management. Max. amt. due on a/c of loans & adv. From directors / officers of the co. Commission, brokerage and non-trade discounts.
JOURNEY OF SCHEDULE VI ENDS THANKS A LOT FOR PATIENT HEARING CA A.K.MOOKIM DHANBAD