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General

Does not apply to (Insurance / Banking / Generation and

supply of electricity) Applicable for Financial Year commencing on or after 1st April 2011. Early adoption not permitted (as it is a Statutory format) Act and Accounting Standards to prevail over Revised Schedule VI. Corresponding figures for Previous year 2010-11 will have to be given. Disclosures are in addition to AS requirement. Instead of Schedules all information in Notes. Cross referencing & balance between excessive or too much aggregation CA Sanjeev Maheshwari Unit of measurement Uniformity

General
Terms used in Revised Schedule VI as defined in AS

E.g.: Associate, Related Party AS 18 AS over RSV


Cash & Cash Equivalent

AS 3 Cash equivalent of less than 3 months Revised Schedule VI Cash equivalent includes upto 12 months

Disclosures required under other laws to be made: Round off

< 100 Crores H / T/ L / M > 100 Crores L / M / Crores

CA Sanjeev Maheshwari

Current Asset
Expected to be realized in, or is intended for sale or

consumption in normal operating cycle Held primarily for being traded Expected to be realized within 12 months after reporting date Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date
All other assets are Non-Current

CA Sanjeev Maheshwari

Operating Cycle
Is the time between the acquisition of assets for

processing and their realization in Cash or cash equivalents Where normal operating cycle cannot be identified, then assumed to be of 12 months Multiple Activities
Each activity Different operating cycle

CA Sanjeev Maheshwari

Current Liabilities
Expected to be settled in normal operating cycle Held primarily for the purpose of being traded

Is due to be settled within 12 months after the reporting

date Does not have unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could at the option of the counterparty, result in its settlement by the issue of equity instrument do not affect its classification. All other liabilities are Non-current Liabilities

CA Sanjeev Maheshwari

Current Assets
Raw Materials & Stores
Intended for consumption Current if within the operating cycle, even if more than

12 months
Finished Goods Held trading

(Excess finished goods or even longer than Operating Cycle Current) Trade Receivables Within 12 months of Balance Sheet date Cash & Cash Equivalent No restriction of use
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Current Liabilities
E.g.: Trade Payables, Salaries & Operating Cost
12 months Operating Cycle Normally working capital, if part of Operating cycle

then Current Liabilities even if > 12 months


Any liability unconditional right to defer
Bank violation of any minor condition
Treat as Non-Current Liability if no call made by bank by

reporting date Treat as Current Liability if call made by bank

CA Sanjeev Maheshwari

Current Liabilities (Cont..)


Employee Benefits Bonus Current Accumulated leave
Normally current
However, if management has right to restrict in next 12 months then to that extent

Non-current
To be determined by Actuary

Funded post-employment benefit


Amount due for payment to the fund in 12 months Current Liabilities

Unfunded post-employment benefits Retirement, Resignation Current Liabilities Others Non-current Liabilities
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`
Shareholders Funds
Share Application Money pending allotment

Equity & Liabilities

Non-Current Liabilitiews

Current Liabilities

Share Capital

Reserves & Surplus

Money Received agaiinst share warants

Long-term borrowings

DTL

Other Longterm Liabilities

Long-term provisions

Short-term borrowings

Trade Payables

Other Current Liabilities

Short-term provisions

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CA Sanjeev Maheshwari

Assets
NonCurrent Assets Current Assets

Fixed Assets

NonCurrent Investments

DTA

Long-term L/A

Other NonC.A

Current Investments

Tangible

Inventories

Intangible

Trade Receivables

Capital w-ip Intangible under develop.

Cash & Cash Equivalents

Short-term L/A

Other CA 11 CA Sanjeev Maheshwari

Non C.L
LT Borrow ings

DT L

Other L T Liabilities

LT Provisio ns
Emplo yee Benefi ts

Bonds / Deben t

Term Loans

Trade Payab les

Def Paym. Liab


L/A from Rel Parties

Deposit s

Othe rs

Othe rs

LT Maturieitie s on Matur. Oblig

Other L/A

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CA Sanjeev Maheshwari

CL

ST Bor rowi ngs

Tra de Pay abl es


Curr. Maturity on L T Debt

Other CL
Employee
Others
Accr. Due & not due

ST Provisio ns

LA Rel Parti es

Loan Repa yble on Dmn d

Unpaid Dividend

Share Appl. Money Unpaid maturd. Amts


Unpaid Dividend

De pos its Oth er LA CA Sanjeev Maheshwari

Other Payable s

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Share Capital
Preference shares to be part of Share capital (Not to

be in line with AS 31, presently) Preference Shares where redemption is overdue, continue as Share capital Subscribers of the memorandum
Unpaid amount to be disclosed as an asset

Reconciliation of the number of shares

outstanding at beginning & end Rights / Preferences & restrictions to each class of shares including restrictions on distribution of dividend & refund of capital
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Shares held by

Share Capital (Cont..)


Holding Company / Ultimate Holding Company Subsidiary of Holding Company / Ultimate Holding Company Associate of Holding Company / Ultimate Holding Company - Separately for each class in aggregate

Shareholders holding more than 5% shares As on date of Balance Sheet and not whole year

Shares reserved for issue under options / contracts


For 5 years aggregate of shares allotted as fully

paid-up
Contracts without payment in cash

Bonus Shares
Bought-back

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CA Sanjeev Maheshwari

Share Capital (Cont..)


If subscription is adjusted against bonafides debt

payable NOT without cash Conversion of loan in event of default NOT without cash As aggregate, not required to give year-wise disclosure Terms of any securities convertible into preference / equity along with earliest date of conversion in descending order from farthest.
Calls Unpaid:

- Aggregate of directors & officers


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Reserves & Surplus


Securities Premium Reserve to be renamed as

Securities Premium Account Other reserves specify the nature Appropriations through reserves and not P&L Account Debit balance in the P&L to be shown as negative figure

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CA Sanjeev Maheshwari

Share Application Money Pending Allotment


Separate line items

Share application money up to issued capital &

not refundable to be disclosed here More than Authorized capital Current liability Minimum subscription not met Current Liability

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CA Sanjeev Maheshwari

Share Application Money Pending Allotment (Cont..)


Terms, nos of shares proposed, premium, period

by which shares to be allotted, authorized capital, interest accrued, period for which money pending, reasons for pendency Calls in advance to be treated as Other Current Liabilities (Dept of Company Affairs Letter of 1961)

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CA Sanjeev Maheshwari

Long-Term Borrowings
Bonds / Debentures

Term Loans (Banks / others)


Deferred Payment Liabilities Deposits Loans & Advances Related Parties Long Term Maturity of Finance Lease obligation Other Loans Advances

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CA Sanjeev Maheshwari

Long-Term Borrowings (Cont..)


Long-term and Term Loans have not been

defined Disclosures

Secured / Unsecured Nature of Security Directors / Others guarantee Bonds / Debentures ROI, Redemption / Conversion Redeemed bonds / debentures which company can reissue Terms of repayment Period and amount of continuing default on balance sheet date

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CA Sanjeev Maheshwari

Long-Term Borrowings (Cont..)


Directors / Others Guarantee Others include ALL Deferred payment liabilities E.g. Def. Sales Tax / Deferred payment for purchase of Fixed Assets Current Maturity of all Long-term Borrowings

Other Current Liabilities and not under LTB / STB Security


Nature Like L&B / Machinery / Stock Where any other person / promoter / shareholder gives security disclosure required However, such security does not make it a secured advance

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CA Sanjeev Maheshwari

Long-Term Borrowings (Cont..)


LTB Continuing default and period

The term Loan is for all LTB & not only for Term loan etc STB Default Disclose only defaults in payment of principal & Interest and not other defaults Date is Balance sheet date and not throughout the year Defaults existing on Balance sheet date to be reported defaults made good before year end not to be reported Deposits under borrowings include:
From Public / ICD
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Related Party Advances should include advances in

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Other Long-term Liabilities


A) Trade Payables

B) Others
Trade payables include only goods purchased

on securities received but not contractual obligation Others include:


Statutory obligations like PF Purchase of Fixed Assets Reimbursement expenses

Interest accrued on Trade payables

Trade Payables
Acceptances
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Long-term Provisions
A) Employee Benefits - Long-term (Non-current) B) Others
E.g.: Provision for warranties

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CA Sanjeev Maheshwari

Short-term Borrowings
Loans Repayable on

Demand (Banks / Others) L & A Related Parties Deposits Other Loans & Advances
Secured / Unsecured / Nature of security / guarantee by

Directors / Others

Period and amount of default


Current maturity of LTB to be shown under Other Current

Liabilities & not S T Borrowings

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CA Sanjeev Maheshwari

Other Current Liabilities


Current Maturity of L T Debt Current Maturity of Finance Lease obligations Interest accrued but not due on borrowings Interest accrued and due on borrowings Income received in advance

Unpaid dividends
Application money Unpaid matured deposits & Debentures & interest

accrued thereon Other Payables


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Other Current Liabilities (Cont..)


Trade Deposits / Security deposits Other Non-

C.L / C.L Other Payables


Statutory dues Service Tax Excise VAT

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CA Sanjeev Maheshwari

Short-term Provisions
A) Employee

B) Others
Provision for Dividend Provision for Taxation Provision for Warranties

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CA Sanjeev Maheshwari

Fixed Assets
New subhead - Office Equipment

Assets under lease shall be separately specified

under each class of asset Leasehold improvement separate class to be continued Acquisition through business combination separate disclosure
Asset disposed through demerger may be disclosed

separately

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CA Sanjeev Maheshwari

Fixed Assets (Cont..)


Other adjustments
Capitalization of exchange differences AS 11 Borrowing Costs - AS 16 To disclose separately

Revaluation 5 years from date of increase or

decrease. AS-10 requires till life of Asset. Leasehold land and Freehold Land to continue as a Separate asset class (AS 19 excludes land lease) AS 26 does not permit revaluation of intangible assets

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CA Sanjeev Maheshwari

Fixed Assets (Cont..)


Intangible assets
Classification of assets introduced now

Capital work-in-progress
Capital advances can now not be included under

capital WIP & have to be shown under L T Loans and Advances


Intangible assets under deployment
First check whether they can be recognized under AS 26

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CA Sanjeev Maheshwari

Non-Current Investments
Classify as Trade & Other Investments

Further classify:
Investment property Investment in Equity instruments Investment in Preference Shares

Investment in Government or trust securities


Investment in debentures or bonds Investment in Mutual Funds Investment in Partnership Firm Other Non-current Investment

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CA Sanjeev Maheshwari

Non-Current Investments (Cont..)


Names of the Body Corporate Subsidiaries / JV / Associates

/ Cont SPE
Nature & Extent

Partnership Firm Names of Firms | All the partners | Total capital and share of each partner

Investments other than at cost, should be separately stated,

specifying the basis of valuation Aggregate amount


quoted investments & M.V

Unquoted investments
Provision for diminution in value of investments

Debenture redeemed partly in 12 months and balance later

- 12 months C.L, Other Non C.L


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Non-Current Investments (Cont..)


Trade Investments Trade Investments not defined anywhere but understood as investment made in shares or debentures of another company to promote the trade and business of first company

Investment Property AS 13 Investment in Land & Bldg that are not intended to be occupied substantially for use or in operation of the investing enterprise

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CA Sanjeev Maheshwari

Non-Current Investments (Cont..)


Aggregate Provision for Diminution in value of

investments
AS 13 L T Investment at cost Provision for Diminution other than temporary Amount of provision netted off shown for each

investment & aggregate of all provisions N.C.I shown separately.

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CA Sanjeev Maheshwari

Non-Current Investments (Cont..)


Controlled Special Purpose Entities
Not defined in Act / Accounting Standards / Revised

Schedule VI If and when such terminology is explained, it will be applicable

Basis of Valuation
Not defined anywhere At Cost Cost Less Provision Lower of cost & fair value

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CA Sanjeev Maheshwari

Non-Current Investments (Cont..)


Investment in partnership firm Name of partners: position as on balance sheet date Amount of capital As on date of balance sheet Difference in Accounting of firms & Company should not be > 6 months When different dates effects of significant transactions on other events that occur Share of partner in profits rather than capital Where separate accounts of partners capital, drawings, current, loans etc
Disclosures with regard to total of capital accounts only Loan not to be considered as capital

LLP is a body corporate & not a partnership firm hence to


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be treated as investment in Body Corporate and not CA Sanjeev Maheshwari partnership firm

Long-term Loans & Advances


Capital Advances

Security Deposits
L&A Related Parties Other L&A
Secured / Unsecured / Doubtful Allowances for Bad & Doubtful debts separately Loans & Advances due by Directors / officers / firms Capital Advances now no longer part of capital

work-in-progress Capital advances will be non-current irrespective of the period


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Long-term Loans & Advances (Cont..)


Other Loans & Advances
Advances recoverable in cash or in kind not

expected to be realized in 12 months or operating cycle E.g.: Prepaid Expenses, Advances Advance Tax VAT / Cenvat Credit Receivable

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CA Sanjeev Maheshwari

Other Non-current Assets


Long Term Trade Receivables

Others
Trade Receivables does not include Contractual

Obligations such as :
Insurance Claims

Sale of Fixed Assets


Interest accrued on Trade Receivables

These are to be covered under Others category

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CA Sanjeev Maheshwari

Other Non-current Assets (Cont..)


Unamortized portion of share issue expenses,

ancillary borrowing costs and discount or premium relating to borrowing earlier Miscellaneous Expenditure AS 16 amortize over loan period for Ancillary borrowing cost and discount or premium
Now no head of Miscellaneous Expenditure to the extent

not written off or adjusted By separate head Unamortized expenses Other Current / Non-current assets

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Current Investments
Investment in Equity instruments Investment in Preference Shares Investment in Government or trust securities Investment in debentures or bonds Investment in Mutual Funds

Investment in Partnership Firm


Other Investments

No requirement to classify investments into trade

& non-trade in respect of Current Assets.

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Inventories
Raw Materials / WIP / Finished Goods / Stores &

Spares / Loose tools & others


Stock in Trade held for trading to be separated from

Finished Goods. Goods in transit under relevant head Mode of valuation to be stated

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CA Sanjeev Maheshwari

Trade Receivables
Secured, Unsecured considered good Doubtful Allowance for bad & doubtful Debts by Directors / officers / firm Current if realizable within 12 months from B/S date

or operating cycle of the business Due date for payment & not date of bill Where no due date is specifically agreed upon, normal credit period allowed

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Cash & Cash Equivalents


Banks / Cheques on hand / Cash on hand / others Earmarked balances with bank to be separately stated (ex unpaid dividend) Margin money / Security against guarantees etc to be disclosed separately Bank deposits with more than 12 months maturity to be disclosed separately Repatriation restrictions if any to be separately stated if long-term then non-current asset Others
Margin money
Security Bank Deposits with > 3 months maturity
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Short-Term Loans & Advances


Loans & Advances Related Parties

Others
Secured / Unsecured Good Doubtful Allowances / Provisions Loans and Advances due to Directors / Officers /

Firms
Security Deposits may be added( though not

prescribed)
CA Sanjeev Maheshwari

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Other Current Assets


Ex-unbilled revenue Unamortized premium on forward contract

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Other Disclosures
Contingent Liabilities
Claims not acknowledged as debt Guarantees For Third Parties Other money for which company is contingently liable (Performance and Counter Guarantees should not be

disclosed)

Commitments
Estimated contracts remaining to be executed on capital

account and not provided for Uncalled liability on shares and other investments partly paid Other Commitments
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Other Disclosures (Cont..)


Include only Cancellation of which will result in a

penalty disproportionate to the benefits involved E.g. Buyback arrangement


Commitment to fund subsidiaries / associates Non-disposal of investments in subsidiaries & undertakings

Amount of Dividend Proposed Arrears of Fixed Cumulative dividend on preference

shares Issue of securities for specific purpose how much unutilized amount has been used / invested
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Revenue from Operations


Sale of products Sale of Services Other operating revenues (-) Excise Duty For Finance Companies (Not necessarily registered

as Finance companies) Interest Other Financial Services

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CA Sanjeev Maheshwari

Revenue from Operations


VAT Guidance note on VAT Collection is on behalf of government & hence net If billing is inclusive of VAT, still segregate the VAT & Account only Net of Taxes Other Operating Revenue Not defined anywhere Includes revenue from operating activity Principal or ancillary but not from sale of products & services Whether an Income is Other operating revenue or Other Income depends on facts of case Sale of Fixed Assets is Other Income & not Other Operating Income Sale of scrap is Other Operating revenue Net foreign exchange gain is Other Income
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Other Income
Interest (other than finance company) Dividend Net gain / loss on sale of investments Other Non-operating Income (Net of Direct expenses) Dividend of Subsidiary Old Schedule VI recognize within the period Revised Schedule VI AS 9 For comparative, NOT to change previous year method Change in dividend recognition change in accounting policy which should be prospectively

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Share of Profit / Loss in Firm / LLP


Shares of Profit / Loss in Firm Share of profit / loss to be accounted as and when accounted by the firm In case the company was a partner during the year, but not at the end of the year, disclose for that period Dates of Balance Sheet gap not to be more than 6 months Share of P&L in LLP Body Corporate

Share of Profit / Loss does not accrue to parties until transferred to their account

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Cost of Materials Consumed


For Manufacturing companies Raw Materials Packing material (where classified as Raw material) Intermediates & Components CONSUMED Internally manufactured components
If sold without processing Finished Goods
If sold after further processing w-i-p If sold sometime with / without processing Manufactured

Components

Internal transfer from one department to another

should be disregarded for consumption figures


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Purchases of Stock-in-trade
Normally for resale

If for further processing, better to include in cost

of materials consumed

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CA Sanjeev Maheshwari

Employee Benefit Expenses


Salaries & Wages PF & Other funds ESOP Staff welfare expenses

Includes Directors Whole-time as well as

Part-time Excludes those who are only on Board and not under a contract of service Penalties paid to statutory authorities like PF, not to be included here
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Finance Cost
Interest Expense

Other Borrowing Cost


Net gain / loss on Foreign currency

transactions and translations Other Borrowing Cost:


Loan processing Commitment Guarantee charges Loan facilities Discounts / Premium
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Other Expenses
All other heads (Rs 100,000 (earlier Rs 5,000)or 1%

of revenue, whichever is higher)


Consumption of stores / power & fuel / rent /

repairs to bldg / repairs machinery / insurance, rates & taxes excluding Income Tax / miscellaneous expenses

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CA Sanjeev Maheshwari

Exceptional Items
From ordinary activities are of such size / nature /

incidence that their disclosure is relevant to explain the performance Examples:


Disposal of Fixed Asset Disposal of Long-term investments Legislative charges having retrospective application Litigation settlement

Disclosure should be made in notes

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CA Sanjeev Maheshwari

Extra-ordinary items
Arise from events or transactions that are clearly

distinct from the ordinary activities of the enterprise and are therefore not expected to occur frequently. Separately disclosed in a manner that its impact on current P&L can be perceived.

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Current Tax
Interest is finance cost and not Current Tax

Penalty which are compensatory in nature as

Interest Cost Other Tax Penalties Other Expenses Wealth Tax Rates & Taxes (Not current tax)

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Prior Period Items


Arise in the current period as a result of ERRORS

or OMISSION in one or more prior periods.

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Disclosure
Nature of Company Disclosures required

Manufacturing companies
Trading Companies Companies rendering or supplying services Company that falls in more than one category

Raw materials under broad heads Goods purchased under broad heads
Purchase of goods traded under broad heads Gross income derived from services rendered under broad heads It will be sufficient compliance with the requirements, if purchases, sales and consumption of raw material and gross income from services rendered are shown under broad heads.

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Other Disclosures
Value of Imports calculated on CIF basis- in

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Rupees and not Foreign currencies Direct Imports arranged on Rupee Payment terms should be disclosed as Imports. If FOB is disclosed, give reasons. Value of all imported materials consumed should include all imported goods whether imported by Company or not. All foreign currency transactions relating to imports and exports should be Gross amount and not Net of TDS. Dividend remittances in foreign currency during CA Sanjeev Maheshwari the year should be shown on Cash Basis.

Disclosure not Required


Managerial remuneration

Licensed / Installed / Actual production


Information of investments purchase / Sold

during the year Companies under same management - Investments / Debtors / LPA Maximum amount due on Account of Loans & Advances from Directors / offices Commission / Brokerage / Non Trade
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QUESTIONS ?
?
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CA Sanjeev Maheshwari +91 98211 19043


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