Key Changes to New Schedule VI

Objectives: Simplification of presentation; Evaluate existing format with respect to unwanted and outdated disclosures; Harmonize and converge with global disclosure requirements; To minimize disclosure requirements for Small and Micro Companies Structure for New Schedule VI: Saral Schedule VI for SMCs: Divided into Parts I & II Simplified Schedule VI for Non-SMCs: Divided into Parts I, II & III SMC Conditions Whose equity or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or Outside India; Which is not a bank, financial institution or an insurance company; Whose turnover (excluding other income) does not exceed fifty crore in the immediately preceding reporting period; Which does not have borrowings (including public deposits) in excess of ten crore at any time during the immediately preceding reporting period; and Which is not a holding or subsidiary company of a company which is not a small and medium sized company; Old Vs New Schedule VI: S. Particulars No. Old Schedule Vi Revised Schedule Vi

Turnover of less than Rs. 100 Crs - R/off to Turnover of less than Rs. 100 Crs R/off to the nearest Hundreds, the nearest Hundreds, thousands or thousands, lakhs or millions or decimal thereof decimal thereof 1 Turnover of Rs. 100 Crs or more but less Rounding off of Figures appearing in than Rs. 500 Crs - R/off to the nearest financial statement 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 2 Current assets & Liabilities are shown Net Working Capital together under application of funds. The net working capital appears on balance

Turnover of Rs. 100 Crs or more R/off to the nearest lakhs, millions or crores, or decimal thereof

Assets & Liabilities are to be bifurcated in to current & Noncurrent and to be shown

sheet.

separately. Hence, net working capital will not be appearing in Balance sheet. Fixed assets to be shown under non-current assets and it has to be bifurcated in to Tangible & intangible assets. Removal of accounting treatment for exchange gain or loss relating to fixed assets acquired from outside India 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

Fixed Assets

There was no bifurcation required in to tangible & intangible assets.

Borrowings

Short term & long term borrowings are grouped together under the head Loan funds sub-head Secured / Unsecured

Finance lease obligation

Finance lease obligations are included in current liabilities Lease deposits are part of loans & advances

Finance lease obligations are to be grouped under the head noncurrent liabilities Lease deposits to be disclosed as long term loans & advances under the head non-current assets

Deposits

Investments

Current and non-current Both current & non-current investments to investments are to be discosed be disclosed under the head investments separately under current assets & non-current assets respectively. Loans & Advance are disclosed alongwith current assets 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. Deferred Tax assets / liabilities to be disclosed under non-current

Loans & Advances

Loans & Advance to subsidiaries & others to be disclosed separately. 9 Deffered Tax Assets Deferred Tax assets / liabilities to be / Liabilities disclosed separately

assets / liabilities as the case may be. Bank balances in relation to ermarked balances, held as Bank balance to be bifurcated in scheduled margin money against borrowings, deposits with more banks & others than 12 months maturity, each of these to be shown separately. Debit balance of Profit and Loss Account to be shown as negative figure under the head Surplus. Therefore, reserve & surplus balance can be negative. It is named as Trade payables and there is no mention of micro & small enterprise disclosure.

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Cash & Bank Balances

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Profit & Loss (Dr Balance)

P&L debit balance to be shown under the head Miscellaneous expenditure & losses.

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Sundry Creditors

Creditors to be broken up in to micro & small suppliers and other creditors.

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Other current liabilities

Current maturities of long term No specific mention for separate disclosure debt to be disclosed under other of Current maturities of long term debt current liabilities. No specific mention for separate disclosure Current maturities of finance of Current maturities of finance lease lease obligation to be disclosed. obligation any item of income / expense any item under which expense exceeds one which exceeds one per cent of the per cent of the total revenue of the revenue from operations or Rs. company or Rs. 5,000 which ever is higher; 1,00,000, which ever is higher; to shall be disclosed separately be disclosed separately Function wise & nature wise Expenses in Statement of Profit and Loss to be classified based on nature of expenses Finance cost shall be classified as interest expense, other borrowing costs & Gain / Loss on foreign currency transaction & translation.

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Separate line item Disclosure criteria

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Expense classification

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Finance Cost

Finance cost to be classified in fixed loans & other loans

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Foreign exchange gain / loss Purchases

Gain / Loss on foreign currency Gain / Loss on foreign currency transaction transaction to be separated into to be shown under finance cost finance costs and other expenses The purchase made and the opening & Goods traded in by the company closing stock, giving break up in respect of to be disclosed in broad heads in

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each class of goods traded in by the company and indicating the quantities thereof.

notes. Disclosure of quantitative details of goods is diluted

Other Key changes: The disclosure requirements specified in Schedule are in addition to and not in substitution of the disclosure requirements specified in the Accounting Standards prescribed under the Companies Act, 1956 Change in nomenclature Sources of Funds has been replaced with Equity & Liabilities and Application Of Funds has been replaced with Assets Share Capital Company would need to show in sub-head Shares held more than 5% in company along with number of shares Separate head introduced for Share Application Money Schedules to the financial statements to form part of notes accounts Presentation changes in balance sheet almost on the same lines as of IAS 1 Result from discontinued operations to be disclosed separately in line with AS 24