presentation ca.dileep surya kumar 1 catching up with global trends

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Presentation CA.Dileep Surya Kumar

Revised Schedule VI

Catching up with global trends

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As per the Government Notification no. F.No.2/6/2008-C.L-V dated 30-3-2011, the Revised Schedule VI is applicable for the financial Statements to be prepared for the financial year commencing on or after April 1, 2011.

Applicable to consolidated financial statements.

Revised Schedule VI would apply to all Indian companies till they are required to follow IFRS-converged Indian Accounting Standards (Ind ASs).

Companies engaged in the generation and supply of electricity, the revised Schedule VI may be followed by such companies till the time a format is prescribed under the relevant statute

Applicability

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1. General Instructions (Applicable for both BS and Statement of P&L)

2. Part 11. Form of Balance Sheet2. General Instructions for preparation of

Balance Sheet3. Part 2

1. Form of Statement of Profit and loss2. General Instructions for preparation of

Statement of Profit and Loss

STRUCTURE OF NEW SCHEDULE -VI

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Compliance with the Act and/or Accounting Standards: –Requirements of the Act and/or Standards will

override the related requirement of Schedule VI.

Disclosures as required by Accounting Standards: –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 the Financial Statements

Other Disclosures: –All other disclosures as required by the Companies Act

shall be made in the notes to accounts in addition to the requirements set out in the Revised Schedule VI

General Instructions in New Schedule VI

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Notes to accounts shall contain information in addition to that presented in the FS and shall provide where required:

a)Narrative descriptions, and b)Information about items that do not qualify

for recognition in those statement. Each item on the face of the Balance Sheet and

Statement of Profit and Loss is to be cross referenced to related information the notes to accounts.

Corresponding amounts for the immediately preceding reporting period(Except in the case of the first FS laid before company)

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Rounding off based on Turnover:

1)Less than 100 cr - Figures to be in nearest Hundreds ,thousand,lakhs or millions or decimals thereof.

2) 100 cr or more - Figures to be in nearest lakhs ,millions or crores, or decimals thereof.

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Particulars Note No.

Figures as at the end of the current reporting period

Figures as at the end of the previous reporting period

I. EQUITY AND LIABILITIES

(1) Shareholders’ Funds

(a) share capital (b) Reserve and Surplus (c) Money received against share

warrants

(2) Share application money pending allotment

(3) Non-current liabilities(a) Long term borrowings(b) Deferred tax liabilities (net)(c) Other long term liabilities(d) Long term provisions

(4) Current Liabilities(a) Short term borrowings(b) Trade payables(c) Other current liabilities(d) Short term provisions

TOTAL

Form of Balance Sheet

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Figures as at the end of the current reporting period

Figures as at the end of the previous reporting period

II. ASSETS

(1) Non-current assets(a) fixed assets

(i) Tangible assets(ii) Intangible assets(iii) Capital work-in-progress(iv) Intangible assets under

development(b) Non- current investments(c) Deferred tax assets (Net)(d) Long term loans and advances(e) Other non-current assets

(2) 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

TOTAL

Format – cont’d

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Share Capital: For each class of Share Capital

*The number and amount of share authorized.

*the number of share- -issued , -subscribed , -fully paid ,and -subscribed but not fully paid.

*Par value per share.

* A reconciliation from the beginning of the year till end of the year .

General Instructions For Preparation Of Balance Sheet

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*Shares in the company held by each shareholder holding more than 5 percent shares specifying the number of shares held.

* 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;*Shares issued for consideration other than cash, Bonus

shares, shares bought back (for 5Yrs).*Shares reserved for issues under options, disinvestments

their terms and conditions.*Terms and earliest date of conversion of securities

convertible in equity or preference shares

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Reserves and 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’.

*Share Options Outstanding Account,include in reserves and surpuls heading.

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* Unlike its predecessor, the revised Schedule contains specific requirements in this regard .

* share application money pending allotment, is required to be divided into two parts :

- the part against which shares will be allotted is in

the nature of equity. - the part which is due for refund is in the

nature of liability * Equity part shown under Share application maney

pending allotment.* Refundable part shown under other current liabilities.

Share Application Money:

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Criteria to be met to classify as current liability ,any of following:---- Expected to be settled in the co’s normal operating cycle, Held primarily for the purpose of being traded, Due to be settled within twelve months after the reporting

date,or There is no unconditional right to defer settlement for at

least 12 months after the reporting date.

* All other liability shall be classified as non-current . * Operating cycle – time between the acquisition of

assets for processing and their realisation in cash or cash equivalents. If can not be identified- duration of 12 months.

Current and non-current liabilities

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*It shall be classifed as: a)Bonds/debentures .

b)Term loans -from banks . -from other parties. c)Deferred payment liabilites. d)Deposites. e)loans and advances from related parties . f)Long term maturities of finance lease

obligations. g)Other loans and advances(specify nature).

Long term borrowings

Non-Current Liabilities

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* Sub- classification as as secured and unsecured, nature of security, guaranteed by directors or others

* Terms of repayment of term loans and other loans shall be stated.

* Period and amount of continuing default as on the balance sheet date in repayment of loans and interest,shall be specified separtely in each case.

* Convertible/Reedemable bonds/debentures (descending order).

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Other Long Term Liabilities shall be classified as:

a)Trade payables. b)Others.

Other Long Term Liabilities

Long term provisions

The amounts shall be classified as:

a)Provisions for employee benefits.b)Others (specify nature).

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Short-Term borrowings:Current Liabilities

a)Loans repayable on demand -from banks. -From other parties . b) Loans and advances from related parties. c) Deposits. d) Oher loans and advances (specify nature) * Sub- classification as as secured and unsecured, nature of security, guaranteed by directors or others.

* Period and amount of continuing default as on the balance sheet date in repayment of loans and interest,shall be specified separtely in each case

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The amount shall be classified as: a) Current maturities of LT 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 dividend g)Application money pending allotment, T & C,

Proposed no. of shares, amount of premium, whether sufficient authorised capital, period for which allotment pending. (Equity or Other current liabilities)

h)Unpaid matured deposits and debentures

Other Current Liabilities

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The amounts shall be classified as: a)Provisions for employee benefits b)Others(specify natures)

Short term provisions

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An item is classified as current: Expected to be realise in or intended for sale or

consumption in normal operating cycle of the co, or is expected to be realized/ settled within twelve

months from reporting date,or If it is held primary for trading or Is cash or cash equivalent .

All other assets shall be classified as non-currentOperating cycle (same as current liabilities)

Current and non current Assets

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Tangible Assets: *Tangible fixed assets are required to be further

classified into the following categories in the notes: a. Land

b. Buildings

c. Plant and equipment

d. Furniture and fixtures

e. Vehicles

f. Office equipment

g. Others (specifying nature)

* Asset under lease – shall be separately specified. * Reconciliation of the gross and net carrying

amounts at beginning and end of reporting period. * Written off or add on account of revaluation of

assets shall show reduced figure and shall give by way of note ( for 5 yrs) the details of such revaluation.

Fixed Assets

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Intangible Assets:* Recognising the importance of intangible fixed

assets, this new category has been added, with sub-classification in the notes as below :

a. Goodwill

b. Brands /trademarks

c. Computer software

d. Mastheads and publishing titles

e. Mining rights

f. Copyrights, and patents and other intellectual property rights,

g. services and operating rights

h. Recipes, formulae, models, designs and prototypes

i. Licenses and franchise

g.Others (specifying nature).

* Disclosure requirment same as tangible assets

Fixed Assets

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Capital work-in-progress :* The (aggregate) amount of capital work-in-progress

(relating to tangible fixed assets) is required to be disclosed as a separate item under ‘fixed assets’ .

• capital advances are required to be disclosed under long-term loans and advances .

Intangible assets under development :* The (aggregate) amount of intangible assets under

development (which would be recognised and measured in accordance with AS 26, Intangible Assets) has to be disclosed separately as a separate item on the face of the balance sheet under ‘fixed assets’.

Fixed Assets

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*Non–current investment shall be classified as trade investments and other investment and further classified as: -property -equity instruments -preference shares -Govt and trust securities -Debentures and bonds -Mutual funds -Partnership firms -Others.

*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

*Name, nature and extent of investment in body corporate.*Name, names of the partners, total capital and sharing ratio

Non-current investments

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*Long-term loans and advances shall be classified as:(a) Capital Advances;(b) Security Deposits;(c) Loans and advances to related parties (giving details

thereof). Reference should be made to AS 18 for identifying the related parties.

(d) Other loans and advances (specify nature).

*The above shall also be separately sub-classified as:(a) Secured, considered good;(b) Unsecured, considered good;(c) Doubtful.

*Allowance for bad and doubtful loans and advances shall be disclosed under the relevant heads separately.

*Due by directors and other officers, firms and companies in which directors are interested to be separately stated.

Long-term loans and advances

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*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).

* Goods-in-transit shall be disclosed under the relevant sub-head of inventories.

* Mode of valuation shall be stated.

Inventories

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*Aggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment should be separately stated.

* Trade receivables shall be sub-classified as: (a)Secured, considered good;(b)Unsecured considered good;(c)Doubtful.

* Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately.

*Debts due by : -Directors,:or

-officers :or

-firms or pvt. Companies respectively in which any director is a partener or a director or a member should be seprately stated.

Trade Receivables

*Words ‘Sundry Debtors’ have been replaced with ‘Trade Receivables’.

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(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.

Cash and cash equivalents

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*Short term loans and advances :

These need to be sub-classified in the notes as: -

-Loans and advances to related parties (giving details thereof)

-Others (specifying nature).*Other current assets: -Other current assets is the residuary

heading, which covers current assets that do not fall into any of the other ‘current asset’ categories.

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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

Form of Statement of Profit and loss

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Form of Statement of Profit and loss


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

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*Profit and Loss: –Now known as ‘Profit and Loss Statement f or 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 Los

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- The items to be disclosed under Revenue from Operations have been specifically indicated for both finance companies and others.

-Payments to auditor as: a.Auditor

b.For taxation matters c.For company law matters d.For management services e.For other services f.For reimbursement of expenses

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*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.

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Comparison between Old & Revised Schedule VISr. No.

Particulars Old Schedule VI Revised Schedule VI

1) Form of Balance Sheet

Both horizontal and vertical form were

allowed

Only vertical form of Balance Sheet has

been specified in the revised Schedule VI

2) Form of Profit and Loss Account

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.

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Comparison… (ii)Sr. No.


4) 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

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Comparison… (iii)Sr. No.


5) 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’

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Comparison… (iv)Sr. No.


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

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Comparison… (v)Sr. No.

Particulars

Old Schedule VI Revised Schedule VI

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

Deferred Tax assets / liabilities to be disclosed

separately

Deferred Tax assets / liabilities to be disclosed

under non-current assets / liabilities as the case may

be.

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Comparison… (vi)Sr. No.

Particulars


12) Cash & Bank

Balances

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.

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Comparison… (vii)Sr. No.

Particulars


14) 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.

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Comparison… (viii)Sr. No.

Particulars


16) 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) Expense classificati

on

Function wise & nature wise

Expenses in Statement of Profit and Loss to be

classified based on nature of expenses

18) Finance Cost

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

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Comparison… (ix)Sr. No.

Particulars


19) 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.

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Comparison… (x)Sr. No.

Particulars


21) 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

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Comparison… (xi)Sr. No.

Particulars


24) Part III-Interpreta

tion

Terms provision, reserve, capital reserve , quoted investment etc. were defined

No such specific definitions.

25) Part IV- Balance Sheet

Abstract

Details of company registration

number, capital raised, Balance Sheet details,

products etc. were required to be attached with

financials

No such requirement.

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presentation ca.dileep surya kumar 1 catching up with global trends

Documents

noncurrent assets

revised schedule vi

statement of profit

intangible assets

preparation of statement

form of statement

cr figures

previous reporting period