6/5/2016

FinancialStatementsScheduleIIICompaniesAct,2013

FinancialStatementsScheduleIIICompaniesAct,2013
(http://taxguru.in/companylaw/financialstatementsscheduleiii
companiesact2013.html)
Admin(http://taxguru.in/author/admin/) |CompanyLaw(http://taxguru.in/category/companylaw/)
23Apr2015(http://taxguru.in/2015/04/23/) 125,071Views
11Comments(http://taxguru.in/companylaw/financialstatementsscheduleiiicompaniesact2013.html#disqus_thread)
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WhatareprovisionsrelatingtofinancialstatementsundertheNewcompaniesact2013
Section129ofcompaniesact2013,providesforpreparationoffinancialstatements.
2(40) to include balance sheet, profit and loss account/income and expenditure account,
cashflowstatement,statementofchangesinequityandanyexplanatorynoteannexedto
theabove.
New section 129 corresponds to existing section 210. It provides that the financial
statementsshallgiveatrueandfairviewofthestateofaffairsofthecompanyandshall
complywiththeaccountingstandardsnotifiedundernewsection133.

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Itisalsoprovidedthat the financialstatementsshallbeprepared intheformprovidedin

newscheduleIII.
ItmaybenotedthatinthenewscheduleIIItheprovisionsforpreparationofbalancesheet
and statement of profit and loss have been given which are on the same lines as in the
existingscheduleVI.
Further,inthenewScheduleIIIdetailedinstructionshavebeengivenforpreparationofconsolidatedfinancialstatementsasconsolidation
ofaccountsofsubsidiarycompaniesisnowmademandatoryinsection129.
Itmaybenotedthatforthefirsttimeaprovisionhasbeenmadeinthenewsection129(3)thatifacompanyhasoneormoresubsidiariesit
willhavetoprepareaconsolidatedfinancialstatementofthecompanyandofallthesubsidiariesintheformprovidedinthenewschedule
III.
Thecompanyhasalsotoattackalongwithitsfinancialstatement,aseparatestatementcontainingthesalientfeaturesofthefinancialsof
thesubsidiarycompaniesinsuchformasmayprescribedbytherules.
Itisalsoprovidedthatifthecompanyhasinterestinanyassociatecompanyorajointventuretheaccountsofthatcompanyaswellasjoint
ventureshallbeconsolidated.
Forthispurposeassociatecompanyhasbeendefinedinnewsection2(6)companyhassignificantinfluencei.e.ithas.20%ofthetotalshare
capitalofthecompanyorhascontrolonthebusinessdecisionunderanagreement.

TheCentralGovernmenthaspowertoexemptanycompaniesfromcomplyingwithanyoftherequirementsmadeunderthesection.
ScheduleIII(Seesection129)GENERALINSTRUCTIONFORPREPARATIONOFBALANCESHEETANDSTATEMENTOFPROFITANDLOSSOFA
COMPANY
GENERALINSTRUCTIONS

(1)WherecompliancewiththerequirementsoftheActincludingAccountingStandardsasapplicabletothe
companiesrequireanychangeintreatmentordisclosureincludingaddition,amendment,substitutionordeletioninthe
headorsubheadoranychanges,inthefinancialstatementsorstatementsformingpartthereof,thesameshallbe
madeandtherequirementsofthisScheduleshallstandmodifiedaccordingly.(2)Thedisclosurerequirements
specifiedinthisScheduleareinadditiontoandnotinsubstitutionofthedisclosurerequirementsspecifiedinthe
AccountingStandardsprescribedundertheCompaniesAct,2013.AdditionaldisclosuresspecifiedintheAccounting
Standardsshallbemadeinthenotestoaccountsorbywayofadditionalstatementunlessrequiredtobedisclosedon
thefaceoftheFinancialStatements.Similarly,allotherdisclosuresasrequiredbytheCompaniesActshallbemadein
thenotestoaccountsinadditiontotherequirementssetoutinthisSchedule.
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BalanceSheet
DebtConsolidationLoans
CashLoansforBadCredit
(3)(i)NotestoaccountsshallcontaininformationinadditiontothatpresentedintheFinancialStatementsandshall

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FinancialStatementsScheduleIIICompaniesAct,2013
(3)(i)NotestoaccountsshallcontaininformationinadditiontothatpresentedintheFinancialStatementsandshall
providewhererequired
a)narrativedescriptionsordisaggregationsofitemsrecognisedinthosestatementsand
b)Informationaboutitemsthatdonotqualifyforrecognitioninthosestatements.
(ii) Each item on the face of the Balance Sheet and Statement of Profit and Loss shall be crossreferenced to any
related information in the notesto accounts. In preparing the Financial Statements including the notes to accounts, a
balance shall be maintained between providing excessive detail that may not assist users of financial statements and
notprovidingimportantinformationasaresultoftoomuchaggregation
(4) (i) Depending upon the turnover of the company, the figures appearing in the Financial Statements maybe
roundedoffasgivenbelow:

Turnover

Roundingoff

(a)lessthanonehundredcrorerupees

Tothenearesthundreds,thousands,lakhsormillions,or
decimalsthereof

(b)onehundredcrorerupeesormore

Tothenearestlakhs,millionsorcrores,ordecimals
thereof.

(ii)Onceaunitofmeasurementisused,itshallbeuseduniformlyintheFinancialStatements.(5)Exceptinthecase
ofthefirstFinancialStatementslaidbeforetheCompany(afteritsincorporation)thecorrespondingamounts
(comparatives)fortheimmediatelyprecedingreportingperiodforallitemsshownintheFinancialStatementsincluding
notesshallalsobegiven.
(6) For the purpose of this Schedule, the terms used herein
shallbeaspertheapplicable

AccountingStandards.

Note:thispartofSchedulesetsouttheminimumrequirementsforonthefaceoftheBalanceSheet,andthe
StatementofProfitandLoss(hereinafterreferredtoasFinancialStatements||forthepurposeofthisSchedule)and
Notes.Lineitems,sublineitemsandsubtotalsshallbepresentedasanadditionorsubstitutiononthefaceofthe
FinancialStatementswhensuchpresentationisrelevanttoanunderstandingofthecompanysfinancialpositionor
performanceortocatertoindustry/sectorspecificdisclosurerequirementsorwhenrequiredforcompliancewiththe
amendmentstotheCompaniesActorundertheAccountingStandards.

PARTIBALANCESHEET
NameoftheCompany.
BalanceSheetasat
Particulars

NoteNo.

Figuresasattheendof
currentreportingperiod

Figuresasattheendof
previousreportingperiod

I.EQUITYANDLIABILITIES
1)ShareholdersFunds(a)ShareCapital
(b)ReservesandSurplus
(c)Moneyreceivedagainstsharewarrants
(2)Shareapplicationmoneypendingallotment
(3)NonCurrentLiabilities(a)Longtermborrowings
(b)Deferredtaxliabilities(Net)
(c)OtherLongtermliabilities
(d)Longtermprovisions
(4)CurrentLiabilities(a)Shorttermborrowings
(b)Tradepayables
(c)Othercurrentliabilities
(d)Shorttermprovisions
Total
II.Assets
(1)Noncurrentassets(a)Fixedassets
(i)Tangibleassets
(ii)Intangibleassets
(iii)Capitalworkinprogress
(iv)Intangibleassetsunderdevelopment
(b)Noncurrentinvestments
(c)Deferredtaxassets(net)
(d)Long TERMLOANS

andadvances

(e)Othernoncurrentassets

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FinancialStatementsScheduleIIICompaniesAct,2013

(e)Othernoncurrentassets
(2)Currentassets(a)Currentinvestments
(b)Inventories
(c)Tradereceivables
(d)Cashandcashequivalents
(e)Shorttermloansandadvances
(f)Othercurrentassets
Total

GENERALINSTRUCTIONSFORPREPARATIONOFBALANCESHEET
PARTICULARS
1.

Whenanassetshallbe
classifiedascurrent?

Ifitsatisfiesanyofthegivencriteria

(a)itisexpectedtoberealised,orisintendedforsaleor
consumption,inthecompanysnormaloperatingcycleor(b)it
isheldprimarilyforthepurposeofbeingtradedor
(c) it is expected to be realised within twelve months after the
reportingdateor
(d) it is cash or cash equivalent unless it is restricted from
beingexchangedorusedtosettlealiabilityforatleasttwelve
monthsafterthereportingdate.

2.

Whenanassetshallbe
classifiedasNonCurrent?
OperatingCycle

AssetotherthanCurrentAssetshallbeclassifiedasnon
current
TimebetweenTheacquisitionofassetsfor
processingAnd

Wherethenormaloperatingcyclecannotbeidentified:Itis
assumedtohaveadurationof12months

Theirrealisationincashorcashequivalents
Whenliabilityshallbe
classifiedascurrent?

Ifitsatisfiesanyofthegivencriteria

(a)Itisexpectedtobesettledinthecompanynormaloperating
cycleor(b)Itisheldprimarilyforthepurposeofbeingtraded
or
(c) It is due to be settled within twelve months after the
reportingdateor
(d)Thecompanydoesnothaveanunconditionalrighttodefer
settlement of the liability for least twelve months after the
reporting cm Terms of a liability that could, at the option the
counterparty, result in its settlement by the issue of equity
instrumentsdonotaffectitsclassification.

Whenanliabilityshallbe
classifiedasNonCurrent?

liabilityotherthanCurrentliabilityshallbeclassifiedasNon
Current.

Whenreceivableshallbe
classifiedasatrade
receivable?

Ifitisinrespectoftheamountdueonaccount
ofgoodssoldorservicesrendered

InTheNormalCourseOfBusiness

Whenpayableshallbe
classifiedasatrade
payable?

Ifitisinrespectoftheamountdueonaccount
ofgoodspurchasedorservicesreceived

InTheNormalCourseOfBusiness

ShareCapital

ForeachClassofShare
Capital(Differentclassesof
preferencesharestobe
treatedseparately)

a.Thenumberandamountofsharesauthorized.b.Thenumberofshares
issued,subscribedandfullypaid,andsubscribedbutnotfullypaid.
c.Parvaluepershare.
d.Areconciliationofthenumberofsharesoutstandingatthebeginningandat
theendofthereportingperiod.
e. The rights, preferences and restrictions attaching to each class of shares
includingrestrictionsonthedistributionofdividendsandtherepaymentofcapital.
f.Sharesinrespectofeachclassinthecompanyheldbyitsholdingcompany
or its ultimate holding company including shares held by or by subsidiaries or
associatesoftheholdingcompanyortheultimateholdingcompanyinaggregate.
g.Sharesinthecompanyheldbyeachshareholderholdingmorethan5per
cent,sharesspecifyingthenumberofsharesheld.
h.Sharesreservedforissueunderoptionsandcontracts/commitmentsforthe
saleofshares/disinvestment,includingthetermsandamounts.
i.Fortheperiodoffiveyearsimmediatelyprecedingthedateasatwhichthe
BalanceSheetisprepared.
i.Aggregatenumberandclassofsharesallottedasfullypaiduppursuantto
contract(s)withoutpaymentbeingreceivedincash.
ii. Aggregate number and class of shares allotted as fully paidup by way of
bonusshares.
iii.Aggregatenumberandclassofsharesboughtback.
j. Terms of any securities convertible into equity/preference shares issued
along with the earliest date of conversion in descending order starting from the
farthestsuchdate.
k. Calls unpaid (showing aggregate value of calls unpaid by directors and
officers).
l.Forfeitedshares(amountoriginallypaidup).

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FinancialStatementsScheduleIIICompaniesAct,2013
ReservesandSurplus

shallbeclassifiedas

1)CapitalReserves2)CapitalRedemptionReserve
3)SecuritiesPremiumReserve
4)DebentureRedemptionReserve
5)RevaluationReserve
6)ShareOptionsOutstandingAccount
7) Other Reserves(specify the nature and purpose of each reserve and the
amountinrespectthereof)
8)Surplusi.e.,balanceinStatementofProfitandLossdisclosingallocationsand
appropriationssuchasdividend,bonussnaresandtransferto/fromreserves,etc.
(Additionsanddeductionssincelastbalancesheettobeshownundereachofthe
specifiedheads)

3.

LongTermBorrowings

Reservespecifically
represented

byearmarkedinvestmentsshallbetermedasafund.

Debitbalanceofstatementof
profitandloss

ShallbeshownasanegativefigureundertheheadSurplus.Similarly,the
balanceofReservesandSurplus,afteradjustingnegativebalanceofsurplus,if
any,shallbeshownundertheheadReservesandSurpluseveniftheresulting
figureisinthenegative.

shallbeclassifiedas

1)Bonds/debentures2) TERMLOANS

(i)frombanks.
(ii)fromotherparties
3)Deferredpaymentliabilities
4)Deposits
5)Loansandadvancesfromrelatedparties
6)Longtermmaturitiesoffinanceleaseobligations
7)Otherloansandadvances(specifynature)
shallbefurthersubclassified
as

SECUREDANDUNSECURED(Natureofsecurityshallbespecifiedseparatelyin
eachcase)

Whereloanshavebeen
guaranteedbydirectorsor
others

Theaggregateamountofsuchloansundereachheadshallbedisclosed.

Bonds/debentures(alongwith
therateofinterestand
particularsofredemptionor
conversion,asthecase
maybe)

shallbestatedindescendingorderofmaturityorconversion,startingfrom
farthestredemptionorconversiondate,asthecasemaybe.Where
bonds/debenturesareredeemablebyinstalments,thedateofmaturityforthis
purposemustbereckonedasthedateonwhichthefirstinstalmentbecomesdue.

Particularsofanyredeemed
bonds/debentures

whichthecompanyhaspowertoreissueshallbedisclosed

Shallstate

Termsofrepaymentof TERMLOANS

Shallspecify

Periodandamountofcontinuingdefaultasonthebalancesheetdatein
repaymentofloansandinterest(separatelyineachcase)

andotherloans

4.

OtherLongterm
Liabilities

shallbeclassifiedas

(1)Tradepayables(2)Others.

5.

Longtermprovisions

shallbeclassifiedas

1)Provisionforemployeebenefits2)Others(specifynature).

6.

Shorttermborrowings

shallbeclassifiedas

1)Loansrepayableondemand(i)frombanks.
(ii)fromotherparties.
(iii)Loansandadvancesfromrelatedparties
(iv)Deposits
(v)Otherloansandadvances(specifynature).

7.

Othercurrentliabilities

Borrowingsshallfurtherbe
subclassifiedas

securedandunsecured(Natureofsecurityshallbespecifiedseparatelyineach
case)

Whereloanshavebeen
guaranteedbydirectorsor
others

Theaggregateamountofsuchloansundereachheadshallbedisclosed.

Shallspecify

Periodandamountofcontinuingdefaultasonthebalancesheetdatein
repaymentofloansandinterest(separatelyineachcase)

shallbeclassifiedas

1)Currentmaturitiesoflongtermdebt2)Currentmaturitiesoffinancelease
obligations
3)Interestaccruedbutnotdueonborrowings
4)Interestaccruedanddueonborrowings
5)Incomereceivedinadvance
6)UnpaidJividends
7)Applicationmoneyreceivedforallotmentofsecuritiesanddueforrefundand
interest accrued thereon. Share application money includes advances towards
allotment of share capital. The terms and conditions including the number of
shares proposed to be issued, the amount of premium, if any, and the period
beforewhichsharesshallbeallottedshallbedisclosed.Itshallalsobedisclosed
whether the company has sufficient authorised capital to cover the share capital
amount resulting from allotment of shares out of such share application money.
Further, the period for which the share application money has been pending
beyondtheperiodforallotmentasmentionedinthedocumentinvitingapplication

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FinancialStatementsScheduleIIICompaniesAct,2013
beyondtheperiodforallotmentasmentionedinthedocumentinvitingapplication
forsharesalongwiththereasonforsuchshareapplicationmoneybeingpending
shallbedisclosed.Shareapplicationmoneynotexceedingtheissuedcapitaland
to the extent not refundable shall be shown under the head Equity and share
application money to the extent refundable, i.e., the amount in excess of
subscription or in case the requirements of minimum subscription are not met,
shallbeseparatelyshownunderOthercurrentliabilities
8)Unpaidmatureddepositsandinterestaccruedthereon
9)Unpaidmatureddebenturesandinterestaccruedthereon
10)Otherpayables(specifynature).

Shorttermprovisions

shallbeclassifiedas

1)Provisionforemployeebenefits2)Others(specifynature).

9.

Tangibleassets

Classificationshallbegiven
as

1)Land2)Buildings
3)PlantandEquipment
4)FurnitureandFixtures
5)Vehicles
6)Officeequipment
7)Others(specifynature).

10

Intangibleassets

Underleaseshallbe
separatelyspecified

undereachclassofasset

Areconciliationofthegross
andnetcarryingamountsof
eachclassofassetsatthe
beginningandendofthe
reportingperiod

showingadditions,disposals,acquisitionsthroughbusinesscombinationsand
otheradjustmentsandtherelateddepreciationandimpairmentlosses/reversals
shallbedisclosedseparately.

Wheresumshavebeen
writtenoffonaeductionof
capitalorrevaluationof
assetsorwheresumshave
beenaddedonrevaluation
ofassets,everybalance
sheetsubsequenttodateof
suchwriteoff,or
addition

shallshowthereducedorincreasedfiguresasapplicableandshallbywayofa
notealsoshowtheamountofthereductionorincreaseasapplicabletogether
withthedatethereofforthefirstfiveyearssubsequenttothedateofsuch
reductionorincrease.

Classificationshallbegiven
as

1)Goodwill2)Brands/trademarks
3)Computersoftware
4)Mastheadsandpublishingtitles
5)Miningrights
6) Copyrights, and patents and other intellectual property rights, services and
operatingrights
7)Recipes,formulae,models,designsandprototypes
8)Licencesandfranchise
9)Others(specifynature).

11.

Noncurrent
investments

Areconciliationofthegross
andnetcarryingamountsof
eachclassofassetsatthe
beginningandendofthe
reportingperiod

showingadditions,disposals,acquisitionsthroughbusinesscombinationsand
otheradjustmentsandtherelateddepreciationandimpairmentlosses/reversals
shallbedisclosedseparately.

Wheresumshavebeen
writtenoffonaeductionof
capitalorrevaluationof
assetsorwheresumshave
beenaddedonrevaluation
ofassets,everybalance
sheetsubsequenttodateof
suchwriteoff,or
addition

shallshowthereducedorincreasedfiguresasapplicableandshallbywayofa
notealsoshowtheamountofthereductionorincreaseasapplicabletogether
withthedatethereofforthefirstfiveyearssubsequenttothedateofsuch
reductionorincrease.

shallbeclassifiedas
TRADEINVESTMENTS and
otherinvestmentsandfurther
classifiedas

1)Investmentproperty2)InvestmentsinEquityInstruments
3)Investmentsinpreferenceshares
4)InvestmentsinGovernmentortrustsecurities
5)Investmentsindebenturesorbonds
6)InvestmentsinMutualFunds
7)Investmentsinpartnershipfirms
8) Other noncurrent investments (specify nature). Under each classification,
details shall be given of names of the bodies corporate indicating separately
whethersuchbodiesare
(i)subsidiaries,
(ii)associates,
(iii)jointventures,or
(iv)controlledspecialpurposeentitiesinwhominvestmentshavebeenmadeand
the nature and extent of the investment so made in each such body corporate
(showingseparatelyinvestmentswhicharepartlypaid).Inregardtoinvestments
in the capital of partnership firms, the names of the firms (with the names of all
theirpartners,totalcapitalandthesharesofeachpartner)shallbegiven.

Investmentscarriedatother

shouldbeseparatelystatedspecifyingthebasisforvaluationthereof

thanatcost

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FinancialStatementsScheduleIIICompaniesAct,2013
Thefollowingshallalsobe
disclosed

1)Aggregateamountofquotedinvestmentsandmarketvaluethereof2)
Aggregateamountofunquotedinvestments
3)Aggregateprovisionfordiminutioninvalueofinvestments.

12.

Longtermloansand
advances

loansandadvancesshallbe
classifiedas:

1)CapitalAdvances2)SecurityDeposits
3)Loansandadvancestorelatedparties(givingdetailsthereof)
4)Otherloansandadvances(specifynature).

13.

Othernoncurrent
assets

Theaboveshallalsobe
separatelysubclassifiedas:

1)Secured,consideredgood2)Unsecured,consideredgood

Allowanceforbadand
doubtfulloansandadvances

shallbedisclosedundertherelevantheadsseparately.

Loansandadvancesdueby
directorsorotherofficersof
thecompanyoranyofthem
eitherseverallyorjointlywith
anyotherpersonsoramounts
duebyfirmsorprivate
companiesrespectivelyin
whichanydirectorisapartner
oradirectororamember

shouldbeseparatelystated.

shallbeclassifiedas

1)LongtermTradeReceivables(includingtradereceivablesondeferredcredit
terms)2)Others(specifynature)

3)Doubtful.

3)LongtermTradeReceivables,shallbesubclassifiedas:

(i)Secured,consideredgood(ii)Unsecured,consideredgood
(iii)Doubtful
Allowanceforbadanddoubtfuldebtsshallbedisclosedundertherelevantheads
separately.
Debts due by directors or other officers of the company or any of them either
severally or jointly with any other person or debts due by firms or private
companies respectively in which any director is a partner or a director or a
membershouldbeseparatelystated.

14.

CurrentInvestments

shallbeclassifiedas

1)InvestmentsinEquityInstruments2)InvestmentinPreferenceShares
3)InvestmentsinGovernmentortrustsecurities:
4)Investmentsindebenturesorbonds
5)InvestmentsinMutualFunds
6)Investmentsinpartnershipfirms
7)Otherinvestments(specifynature).

Undereachclassification

detailsshallbegivenofnamesofthebodiescorporateindicatingseparately
whethersuchbodiesare:(i)subsidiaries,
(ii)associates,
(iii)jointventures,or
(iv)controlledspecialpurposeentitiesinwhominvestmentshavebeenmadeand
the nature and extent of the investment so made in each such body corporate
(showingseparatelyinvestmentswhicharepartlypaid).Inregardtoinvestments
in the capital of partnership firms, the names of the firms (with the names of all
theirpartners,totalcapitalandthesharesofeachpartner)shallbegiven.

followingshallalsobe
disclosed:

1)Thebasisofvaluationofindividualinvestments2)Aggregateamountofquoted
investmentsandmarketvaluethereof
3)Aggregateamountofunquotedinvestments
4)Aggregateprovisionmadefordiminutioninvalueofinvestments

15.

Inventories

Inventoriesshallbeclassified
as:

1)Rawmaterials2)Workinprogress
3)Finishedgoods
4)Stockintrade(inrespectofgoodsacquiredfortrading)
5)Storesandspares
6)Loosetools
7)Others(specifynature)

16.

TradeReceivables

Goodsintransit

shallbedisclosedundertherelevantsubheadofinventories

Modeofvaluation

shallbestated

Shallseparatelystateshallbe
subclassifiedas

AggregateamountofTradeReceivablesoutstandingforaperiodexceedingsix
monthsfromthedatetheyaredueforpayment
1)Secured,consideredgood2)Unsecured,consideredgood
3)Doubtful.
Allowanceforbadanddoubtfuldebtsshallbedisclosedundertherelevantheads
separately.
Debts due by directors or other officers of the company or any of them either
severally or jointly with any other person or debts due by firms or private
companies respectively in which any director is a partner or a director or a
membershouldbeseparatelystated.

17.

Cashandcash
equivalents

shallbeclassifiedas

1)Balanceswithbanks2)Cheques,draftsonhand
3)Cashonhand
4)Others(specifynature)

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FinancialStatementsScheduleIIICompaniesAct,2013
4)Others(specifynature)

18.

Shorttermloansand
advances

Earmarkedbalanceswith
banks(forexample,forunpaid
dividend)

shallbeseparatelystated

Balanceswithbankstothe
extentheldasmarginmoney
orsecurityagainstthe
borrowings,guarantees,other
commitments

shallbedisclosedseparately.

Repatriationrestrictions,if
any,inrespectofcashand
bankbalances

shallbedisclosedseparately.

Bankdepositswithmorethan
twelvemonthsmaturity

shallbedisclosedseparately.

shallbeclassifiedas:

1)Loansandadvancestorelatedparties(givingdetailsthereof)2)Others
(specifynature).

aboveshallalsobesub
classifiedas

1)Secured,consideredgood2)Unsecured,consideredgood

Allowanceforbadand
doubtfulloansandadvances

shallbedisclosedundertherelevantheadsseparately

Loansandadvancesdueby
directorsorotherofficersof
thecompanyoranyofthem
eitherseverallyorjointlywith
anyotherpersonoramounts
duebyfirmsorprivate
companiesrespectivelyin
whichanydirectorisapartner
oradirectororamember

shallbeseparatelystated

3)Doubtful.

19.

Othercurrentassets
(specifynature)

anallinclusiveheading

whichincorporatescurrentassetsthatdonotfitintoanyotherassetcategories

20.

Contingentliabilities
(totheextentnot

shallbeclassifiedas

1)Claimsagainstthecompanynotacknowledgedasdebt

providedfor)
commitments(tothe
extentnotprovidedfor)

shallbeclassifiedas

2)Guarantees3)Othermoneyforwhichthecompanyiscontingentlyliable.
1) Estimated amount of contracts remaining to be executed on capital account
andnotprovidedfor
2)Uncalledliabilityonsharesandotherinvestmentspartlypaid
3)Othercommitments(specifynature).

PARTIIPROFIT&LOSSSTATEMENT
NameoftheCompany..
ProfitandLossstatementfortheyearended.
Particulars

NoteNo.

Figuresasattheendof

Figuresasattheendofthe

currentreportingperiod

previousreportingperiod

CONTINUINGOPERATIONS(1)
I

Revenuefromoperations(gross)

II

Otherincome

III

Totalrevenue(1+2)

VI

Expenses(a)Costofmaterialsconsumed
(b)Purchasesofstockintrade
(c)Changesininventoriesoffinishedgoods,work
inprogressandstockintrade
(d)Employeebenefitsexpense
(e)Financecosts
(f)Depreciationandamortisationexpense
(g)Otherexpenses

Totalexpenses

Profitbeforeexceptionalandextraordinary
itemsandtax(IIIIV)

VI

Extraordinaryitems

VII

Profit/(Loss)beforeextraordinaryitemsand
tax(V+VI)

VIII

Extraordinaryitems

IX

Profitbeforetax(Vl(/+)VIII)

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FinancialStatementsScheduleIIICompaniesAct,2013

Taxexpense:(I)Currenttaxexpenseforcurrent
year
(II)Deferredtax

XI

Profit/(Loss)fromcontinuingoperations
(IX+X)

XII

ProfitV(loss)fromdiscontinuingoperations

XIII

Taxexpenseofdiscontinuingoperations

XIV

Profit/(loss)fromDiscontinuingoperations
(aftertax)(XIIXIII)

XV

Profit(Loss)fortheperiod(XI+XIV)

XVI

Earningsperequityshare:(1)Basic
(2)Diluted

EXAMQUESTIONS
AUDITMAY14
Q.1KAYLtd.isintheprocessoffinalizingitsaccountsforyearended31stMarch,2014andfurnishesthefollowinginformation:
(I)Finishedgoodsnormallyareheldfor30daysbeforesale.
(ii)SalesrealizationfromDebtorsusuallytakes60daysfromdateofcreditinvoice.
(iii)Rawmaterialsareheldinstocktocoveronemonthsproductionrequirements.
(iv)Packingmaterials,beingspecificallymadeforthecompanyandhavingleadtimeof90daysisheldinstockfor90days.
(v)Theholdingperiodinrespectofunfinishedgoodsis30days.
(vi)BeingamonopolyKAYLtd.enjoysacreditperiodof12.5monthsfromitssupplierswhosometimesattheendoftheircreditperiod
optforconversionoftheirduesintolongtermdebtofKAYLtd.
YouarerequiredtocomputetheoperatingcycleofKAYLtd.asperrevisedScheduleIIIofCompaniesAct,1956.Asthesuppliersof
thecompanyarepaidoffafteracreditperiodof12.5monthsshouldthisbepartofCurrentLiability?Wouldyouranswerbethesameif
thecreditorsaresettledin330days?
Answer
(a) Operating cycle of Kay Ltd. will be computed as under: Raw material stock holding period + Workinprogress holding period + Packing
Materialsholdingperiod+finishedgoodsholdingperiod+Debtorscollectionperiod=1+1+3+1+2=8monthsClassificationofliabilityto
suppliers:ScheduleIIIprovidesthat:Aliabilityshallbeclassifiedascurrentwhenitsatisfiesanyofthefollowingcriteria:
i.Itisexpectedtobesettledinthecompanysnormaloperatingcycle
ii.Itisheldprimarilyforthepurposeofbeingtraded
iii.Itisduetobesettledwithintwelvemonthsafterthereportingdateor
iv.thecompanydoesnothaveanunconditionalrighttodefersettlementoftheliabilityforatleasttwelvemonthsafterthereportingdate.
Termsofaliabilitythatcould,attheoptionofthecounterparty,resultinitssettlementbytheissueofequityinstrumentsanddonotaffectits
classification.
Therearetwosituations:
a.Whencreditperiodgivenbysupplieris12.5months:Thenatureofclassificationofliabilityistobeseenwithreferencetothereportingdate.
HenceallliabilitiesexceptthosethatariseinthelastfortnightoftheaccountingperiodwillbeCurrentasthiswillhavetobesettledwithin12
monthsofthereportingdate.Thus,allliabilitiesthatdonotariseinthelastfortnightoftheaccountingperiodwillbeNonCurrent.
b.Whencreditperiodgivenbysuppliersis330days(i.e.11monthsapprox.):IftheCreditorsaresettledin330daysi.e.within11months.
Thissatisfiesthethirdconditioni.e.itisduetobesettledwithintwelvemonthsafterthereportingdateandthereisnooptiontodefer
it.Hence,inthecaseitwillbetreatedascurrentliability.
AUDITMay13
Q.2 The Balance Sheet of G Ltd as at 31st March 13 is as under. Comment on the presentation in terms of revised Schedule III and
AccountingStandardsissuedbyNFRA.
Answer
Heading

NoteNo.

31sMarch,13

31stMarch,12

Equity&Liabilities

ShareCapital

xxx

xxx

Reserves&Surplus

xxx

xxx

Shareapplicationmoney

xxx

xxx

NonCurrentLiabilities

xxx

xxx

Deferredtaxliability((ArisingfromIndianIncomeTax)

Employee STOCKOPTION

outstanding

http://taxguru.in/companylaw/financialstatementsscheduleiiicompaniesact2013.html

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6/5/2016

FinancialStatementsScheduleIIICompaniesAct,2013

CurrentLiabilities

xxx

xxx

TradePayables

xxx

xxx

Total

xxxx

xxxx

Assets

NonCurrentAssets

FixedAssetsTangible

xxx

xxx

CWIP(includingcapitaladvances)

xxx

xxx

TradeReceivables

xxx

xxx

DeferredTaxAsset((ArisingfromIndianIncomeTax)

10

xxx

xxx

P&lDebitbalance

Total

xxxx

xxxx

FollowingErrorsarenoticedinpresentationasperScheduleIII:
(I)ShareCapital&Reserve&SurplusaretobereflectedundertheheadingShareholdersfunds,whichisnotshownwhilepreparingthebalance
sheet.AlthoughitisapartofEquityandLiabilitiesyetitmustbeshownunderheadShareholdersfunds.TheheadingShareholdersfundsis
giveninthequestionmissinginthebalancesheet.
(ii) Reserve & Surplus is showing zero balance, which is not correct in the given case. Debit balance of statement of profit & Loss should be
shownasanegativefigureundertheheadSurplus.ThebalanceofReservesandSurplus,afteradjustingnegativebalanceofsurplusshallbe
shownundertheheadReservesandSurpluseveniftheresultingfigureinnegative.
(iii)ScheduleIIIrequiresthatEmployee STOCKOPTION

outstandingshouldbedisclosedundertheheadingReservesandSurplus

(iv)ShareapplicationmoneyrefundableshallbeshownunderthesubheadingOtherCurrentLiabilities.Asthisisrefundableandnotpendingfor
allotment,henceitisnotapartofequity.
(v)DeferredTaxLiabilityhasbeencorrectlyshownunderNonCurrentLiabilities.ButDeferredtaxassetsanddeferredtaxliabilities,both,cannot
beshowninbalancesheetbecauseonlythenetBalanceofDeferredTaxLiabilityorAssetistobeshown.
(vi)UnderthemainheadingofNonCurrentAssets,FixedAssetsarefurtherclassifiedasunder:
I.TangibleassetsII.Intangibleassets
III.CapitalworkinProgressIV.Intangibleassetsunderdevelopment.
Keepinginviewtheabove,theCWIPshallbeshownunderFixedAssetsasCapitalWorkinProgress.TheamountofCapitaladvancesincluded
inCWIPshallbedisclosedunderthesubheadingLong TERMLOANS

andadvancesundertheheadingNonCurrentAssets.

(vii)DeferredTaxAssetshallbeshownunderNonCurrentAsset.ItshouldbethenetbalanceofDeferredTaxAssetafteradjustingthebalance
ofdeferredtaxliability.
AUDITNOV12
Q.3HLtd.engagedinthebusinessofmanufacturinglotuswine.Theprocessofmanufacturingthiswinetakesaround18months.Due
tothisreasonHLtd.hasprepareditsfinancialstatementsconsideringitsoperatingcycleas18monthsandaccordinglyclassifiedthe
rawmaterialpurchasedandheldinstockforlessthan18monthsascurrentasset.Commentontheaccuracyofthedecisionandthe
treatmentofassetbyHLtd.AsperScheduleIII.
Answer
AsperScheduleIII,oneofthecriteriaforclassificationofanassetasacurrentassetisthattheassetisexpectedtoberealisedinthe
companysoperatingcycleorisintendedforsaleorconsumptioninthecompanysnormaloperatingcycle.
Further,ScheduleIIIdefinesthatanoperatingcycleisthetimebetweentheacquisitionofassetsforprocessingandtheirrealizationincash
orcashequivalents.
However,whenthenormaloperatingcyclecannotbeidentified,itisassumedtohavedurationof12months.Asperthefactsgiveninthe
question,theprocessofmanufacturingoflotuswinetakesaround18monthstherefore,itsrealisationintocashandcashequivalentswill
bedoneonlywhenitisreadyforsalei.e.after18months.
This means that normal operating cycle of the product is 18 months. Therefore, the contention of the companys management that the
operatingcycleoftheproductlotuswineis18monthsandnotl2monthsiscorrect.H.Ltd.willclassifytherawmaterialpurchased8cheldin
stockascurrentassetin
(CA SurendraAgrawal (M.COM,LLB,ACA) PH9313336776 Email ca.surendra@gmail.comAuthor can be contacted by those who wants to
CompleteCAFinalAuditin18Days)

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Jointhediscussion
YogitaJoshi 5monthsago

howtheinterimdividendsadjustedinbothstatements

Reply Share

SubhasishJena,Rourkela 9monthsago

PlzclarifyprovisionsregardingtreatmentofDiscountonissueofshares/debentures.

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SubhasishJena,Rourkela 9monthsago

itisveryhelpfulforstudentstounderstandaboutBalanceSheet.

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SOUNDARYA 9monthsago

OKKKKKKKKK

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Pawan 10monthsago

Niceandinformativearticle.PlzclarifyprovisionsregardingtreatmentofDiscountonissueofshares/debentures.

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CA.AjayAgrawal,Nashik 10monthsago

verynicecompilation

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NikhilKhandelwal 10monthsago

wheredutydrawbackreceivableonexportsshouldbedisclose?
plztellmeadvice

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RakeshJha 10monthsago

ItisBeneficialforstudents.

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venkataramanan ayearago

quiteuseful

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gaurav ayearago

nicearticle

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CAVinayakAsundi ayearago

Nov2012AuditQuestion
InventoryispreclassifiedAscurrentasset.
Thereforeitneednotbeputtothose4testsgiveninthedefinitionofcurrentassets.

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