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Revised Schedule VI


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Revised Schedule VI

  1. 1. Notification No. 447(E) dated 28.2.2011 Hiren Bhandari 9783939420
  2. 2. Need & ImportanceThe main aim of Revised Schedule VI is to attain compatibilityand convergence with IFRS in India.To eliminate numerous statistical and disclosure requirementwhich are not relevant for investors.The existing Schedule VI does not require companies to classifytheir assets and liabilities into current and non-current.For ours perspective, ICAI has mandatory implementedRevised version in Nov 2012 exams and onwards.
  3. 3. Major Issues Only vertical form of Balance Sheet and P&L is allowed. All assets & liabilities to be classified into current and non-current. Applicable to all companies. Form of statement of P&L has been provided. AS has overriding effects. All addition disclosure, line-items and sub line-items shall be made in way of notes to accounts.
  4. 4. 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.
  5. 5. Current/Non-CurrentDistinction An item is classified as current  if it is involved in the entitys 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
  6. 6. Balance Sheet : Equity/LiabilitiesParticulars Note Figures at the Figures at the No. end of current end of previous reporting reporting period periodShareholders’ Funds Share Capital Reserve & Surplus Money Reserved against share warrantsShare Application money pendingAllotmentNon Current Liabilities Long Term Borrowings Deferred Tax Liabilities (Net) Other Long Term Liabilities Long Term ProvisionsCurrent Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions
  7. 7. Key Highlights The 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
  8. 8. Whats New  New Line Items -  New Line Items - Liabilities: Assets:  Money received against  Intangible Assets under Share Warrants development  Trade Payables  Trade Receivables  Share Application  Separate headings for Money pending classifying Non current allotment and Current Assets.  Separate headings for  Cash and cash classifying Non current equivalents. and Current Liabilities.
  9. 9. 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 5percent 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)
  10. 10. 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.
  11. 11. Long Term & Short TermBorrowings 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 othersImportant Point Convertible/Reedemable bonds/debentures (descending order) Continuing default in repayment (period and amount, interest) Terms of repayment of term loans and other loans
  12. 12. Other Long-term LiabilitiesThe amount shall be classified as : Trade Payables and OthersLong-term & Short-term ProvisionsThe amount shall be classified as : Provision for employee benefits Others (Specify nature) Removed specific mention of Provision for taxation Proposed Dividend Provision for Contingencies Provision for Provident Fund Schemes
  13. 13. 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);
  14. 14. Balance Sheet : AssetsParticulars Note Figures at the Figures at the No. end of current end of previous reporting reporting period periodNon- 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 AssetsCurrent Assets(a) Current Investments(b) Inventories(c) Trade Receivables(d) Cash and Cash Equivalents(e) Short Term Loans and Advances(f) Other Current Assets
  15. 15. Fixed AssetsTangible Assets Land, 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 noteIntangible Assets Goodwill, Brands, Computer Software, etc. Reconciliation & detail same as above
  16. 16. 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.
  17. 17. 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 investmentsNote :- 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.
  18. 18. 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 AssetsOther Non-current assets shall be classified as: (a) Long-term trade Receivables. (b) Other (Specify nature)
  19. 19. 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.
  20. 20. 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)
  21. 21. 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
  22. 22. 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.
  23. 23. Contingent Liabilities andCommitmentsContingent Liabilities to be classified as under : Claims against company not acknowledge as debts Guarantees Other money for which company is contingent liable. Amount of dividends proposed to be disclosed separatelyCommitments to be classified as under : Uncalled liability on share and other partly paid investment Other Commitment (specify nature)
  24. 24. Part – II : Statement of Profit & LossParticulars Note Figures at the Figures at the No. end of current end of previous reporting reporting period periodRevenue from OperationsOther IncomeTotal Revenue ( I + II)ExpensesCost of Material ConsumedPurchases of Stock in TradeChanges in inventories of finished goodsWork in progress and stock in tradeEmployee Benefit expenseFinance CostsDepreciation and amortization expenseOther expensesProfit Before Exceptional and extraordinaryitems and taxExceptional Items
  25. 25. Part – II : Statement of Profit & LossParticulars Note Figures at the Figures at the No. end of current end of previous reporting reporting period periodProfit Before extraordinary items and taxExtraordinary ItemsProfit Before TaxTax Expense Current Tax Deferred TaxProfit (loss) for the period from continuingoperationsProfit (loss) from discontinuing operationsTax expense of discontinuing operationsProfit(loss) from discontinuing operations(after tax)Profit (loss) for the periodEarnings per equity shareBasic
  26. 26. 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
  27. 27. General Instructions forPreparation 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,”.
  28. 28. 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 BY GOOGLE
  29. 29. Questions ?????
  30. 30. THANK YOUPresented By - HIREN BHANDARI