FINANCIAL STATEMENTS OF COMPANIES
LEARNING OBJECTIVES
Format of Statement of Profit and Loss and Balance Sheet
Accounts related to current tax, advance tax, tax payable, etc.
Deferred tax
Provisions relating to disposal of profits, particularly dividends
Preparation of Statement of Profit and Loss and Balance Sheet as per Division I Non-Ind AS, Schedule III.
Overview of Division II Ind AS, Schedule III.
FINANCIAL STATEMENT
Meaning of Financial Year
Types of Financial statements on the Basis of Period
Legal Requirements related to Financial Statements as provided in S. 129 (i) (ii) (iii) (iv)mutatis mutandis,
9.3
National Financial Reporting Authority
standards of accounting prima facie
MONEY RECEIVED AGAINST SHARE WARRANTS
It is shown as a separate line item: ‘Money received against share warrants’ under Shareholder’s Funds.
SHARE APPLICATION MONEY PENDING ALLOTMENT
9.4
SCHEDULE III TO THE COMPANIES ACT, 2013
vide
The Revised Schedule VI to the Companies Act, 1956 was applicable to the companies for the Financial Statements to be prepared for the financial year commencing on or after April 1, 2011. As per the new Companies Act, 2013 this has been numbered as Schedule III.
DIVISION I
DIVISION II -
DIVISION III
SCHEDULE III
DIVISION I - NON IND AS
General Instructions for Preparation of Financial Statements
1. Overriding status to other requirements of the Companies Act and to the Accounting Standards:
inter se, Thus, the Schedule III of the Companies Act, 2013 gives overriding status to the other requirements of the Companies Act, 2013 and the Accounting Standards as applicable to the companies. In other words, the requirements of the Accounting Standards and other provisions of the Companies Act would prevail over the Schedule.
2. Disclosure requirements of the Schedule III are in addition to and not in substitution of disclosure requirements of the Accounting Standards : Disclosure requirements specified in Part I (Form of Balance Sheet) and Part II (Form of Statement of Profit and
Loss Account) of the Schedule are in addition to and not in substitution of the disclosure requirements specified in the Accounting Standards prescribed under the Companies Act, 2013.
3. Notes to Accounts shall contain information in addition to that presented in Financial Statements
4. New norms of rounding off
Total Income Rounding off
5. Figures for immediately preceding period
6. Terms used in the Schedule:
Notes to General Instructions : This part of Schedule sets out the minimum requirements for disclosure on the face of the Balance Sheet, and the Statement of Profit and Loss (hereinafter referred to as “Financial Statements” for the purpose of this Schedule) and Notes, Line items, sub-line items and sub-totals shall be presented as an addition or substitution on the face of the Financial Statements when such presentation is relevant to an understanding of the company’s financial position or performance or to cater to
9.6
industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Accounting Standards.
PART I
Format of BALANCE SHEET
Name of the Company ……… Balance Sheet as at …......……
Particulars
I. EQUITY AND LIABILITIES
(1) Shareholders’ funds a b c
(2) Share application money pending allotment
(3) Non-current liabilities
(a)
(b)
(c)
(d)
(4) Current liabilities
(a)
(b)
(c)
(d)
Note No. Figures as at the end of current reporting period Figures as at the end of the previous reporting period
Particulars
II. ASSETS
(1) Non-current assets (a) i ii iii iv (b) (c) (d) (e)
(2) Current assets
(a) (b) (c) (d) (e) (f)
See accompanying notes to the financial statements. Notes:
9.7
Note No. Figures as at the end of current reporting period Figures as at the end of the previous reporting period
GENERAL INSTRUCTIONS FOR PREPARATION OF BALANCE SHEET
1. An asset shall be classified as current when it satisfies any of the following criteria: a -
9.8
As per the Guidance Note on Division I Non-Ind AS Schedule III to the Companies Act, 2013 (Revised January, 2022 Edition, Para 8.7 “Based on the above definition, on the face of the Balance Sheet, the following items shall be disclosed under non-current assets:
Explanation of the definition of current assets
Clause (a): If an asset is expected to be realised in, or is intended for sale or consumption in the company’s normal operating cycle:
Clause (b): If an asset is held primarily for the purpose of being traded:
Clause (c) : If an asset is expected to be realised within 12 months after the reporting date:
Clause (d): If an asset is cash or cash equivalents unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date: `
2. Operating cycle
ILLUSTRATION 1 (Operating Cycle and Determination of Current Assets)
Classify trade receivables as current asset/non-current asset from the following information: Particulars
(months from the reporting date)
Solution
3. A liability shall be classified as current when it satisfies any of the following criteria:
Explanation of definition of current liabilities
Clause (a): If a liability is expected to be settled in the company’s normal operating cycle:
ILLUSTRATION 2 (Determination of Operating Cycle, Current Assets and Current Liabilities)
Bharat Tushar Ltd. provides you the following information:
Raw material stock holding period: 4 months, Work-in-progress holding period: 2 months, Finished goods holding period: 3 months, Debtors collection period: 5 months You are required to compute the operating cycle and State with reason whether the following should be disclosed as Current Assets or Non-Current Assets or Current Liabilities or Non-Current Liabilities in the Balance Sheet as at 31st March, 2022 as per Schedule III:
(i) W, a customer whose expected realization date is 30th April, 2023.
(ii) X, a customer whose expected realization date is 30th June, 2023.
(iii) Y, a supplier whose expected payment date is 30th April, 2023.
(iv) Z, is supplier whose expected payment date is 30th June, 2023. [B. Com. Delhi, 2022] Solution
i Current asset : Reason:
ii Non-current asset : Reason:
iii Current liability : Reason:
iv Non-Current liability : Reason:
Clause (b) : If a liability is held primarily for the purpose of being traded:
Corporate Accounting –UGCF | NEP
AUTHOR : BHUSHAN KUMAR GOYAL
PUBLISHER : TAXMANN
DATE OF PUBLICATION : DECEMBER 2024
EDITION : 12TH EDITION
ISBN NO : 9789364556859
NO. OF PAGES : 1224
BINDING TYPE : PAPERBACK
DESCRIPTION
This comprehensive textbook is tailored for B.Com. (Hons.) and B.Com. students under the Undergraduate Curriculum Framework (UGCF) and National Education Policy (NEP). It covers the latest provisions of the Companies Act, 2013, updated Accounting Standards, and Ind AS, providing a thorough understanding of corporate accounting systems.
The book features systematically organised chapters, simplified explanations, and extensive illustrations to enhance conceptual clarity and practical application. It includes assignments, objective questions, and recent university examination papers to ensure exam readiness and practical proficiency. Additionally, it guides readers in preparing company financial statements effectively.
This textbook is divided into two volumes for comprehensive coverage:
Volume I – Text & Illustrations
Volume II – Assignments
The Present Publication is the 12th Edition (based on NEP), authored by Bhushan Kumar Goyal, with the following noteworthy features:
• [Up-to-Date Content] Incorporates the amended Schedule III, key Accounting Standards (e.g., AS 4, AS 10, AS 26), and Guidance Notes issued by ICAI, along with Ind AS-based treatments
[Practical and Exam-Focused]
o Includes a wide range of illustrations, assignments, objective questions, and recent exam papers (July 2023 & May 2024)
o Reinforces theoretical concepts through practical problem-solving exercises
[Simplified Presentation]
o Clear, concise explanations with systematically organised chapters
o Financial statements follow prescribed formats for accuracy and practical application
[Comprehensive Coverage] Combines theoretical clarity with practical insights, featuring learning aids, summaries, and key terms for effective revision
