SCHEDULE III: DISCLOSURE & REQUIREMENTS BY CA ANKUR AGRAWAL TAXMANN ACADEMY
Companies Complying with Accounting StandardsDivision 1
Applicability
Companies Complying with IND AS- Division 2
NBFC- Division 3
Composition of Financial Statements Balance Sheet
Statement of Profit and Loss
Cash Flow Statement
Notes to Financial Statements containing significant accounting policies
Schedule III disclosures are additional and not substitute to disclosures as stated in AS. Rounding off – turnover based criteria; to be used uniformly across the financial statements
General Principles
< Rs. 100 crores : hundreds, thousands, lakhs, millions or decimals thereof > Rs. 100 crores : lakhs, millions, crores or decimals thereof Corresponding Previous year's numbers to be included except for the first financial statements
Current / Non – current classification - operating cycle considerations
Classification into Current & Non Current • An entity shall classify an asset as current when o Fulfils any 1 condition out of the 4 conditions
• Condition 1. • It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
• Example 1
•Operating Cycle is 15 Months
• An item of RM which is intended to consume within 8 months • An item of RM which is intended to consume within 14 months
• An item of RM which is intended to consume within 18 months
Example 2 Suppose operating cycle is 9 Months
• An item of RM which is intended to consume within 4 months • An item of RM which is intended to consume within 10 months
• It expects to realise the asset within twelve months after the reporting period
Condition 2
• Example 3. (normal Operating Cycle-14 Months) • A Debtors is expected to pay in 3 months • A Debtors is expected to pay in 15 months • A Debtors to whom Machinery is sold is expected to pay in 3 months • A Debtors to whom Machinery is sold is expected to pay in 13 months
• A Debtors to whom Machinery is sold is expected to pay in 16 months • An Item of Finished goods is expected to be sold within 9 Months • An Item of Finished goods is expected to be sold within 15 Months
Condition 3 It holds the asset primarily for the purpose of trading
• Condition 3 Applies to derivative Instruments also
Condition 4
• The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
• Balance Sheet Share Capital
• For each class of shares – authorised, issued, subscribed and paid up capital, • number of shares of current year and corresponding year / period. • Reconciliation of number of shares – movement from the beginning of year to the end of the year • Shares held by holding company and subsidiary of holding company
• Details of shares held by shareholders holding more than 5% of the aggregate shares • Aggregate number of shares allotted as fully paid up by way of bonus shares / shares allotted as fully paid pursuant to a contract(s) without payment being received in cash
Balance Sheet Long / Short term borrowings:
• Category wise : Debentures, term loans – party [banks / financial institutions / related parties] • nature wise [rupee / foreign currency] • Nature of security (if secured), • significant terms – interest (rate and payment terms),
• re payment terms, any change in terms during the current year, •
specific disclosure if guarantee given by Directors
Balance Sheet Other long term / current liabilities
• Trade payables – dues on account of goods purchased or services received and includes ‘Acceptances’ ; contractual obligations (eg: interest accrued, PF payable etc.) not be included under ‘Trade Payables’ • Other current liabilities – interest accrued and due / but not due on borrowings, advance from customers, employee benefits payable, statutory dues including PF and TDS , unpaid dividend [to specifically state as to whether there are any amount to be transferred to IEPF) etc.
Balance Sheet Tangible / Intangible Assets:
• Movement for gross block and accumulated depreciation for each class of assets • Own assets, assets taken on finance lease and assets given on operating lease to be clearly distinguished • Any acquisition through amalgamation to be specifically stated
• Revaluation – disclosures to include effective date of revaluation, involvement of independent actuary, method and significant assumption, • Disclosure of any impairment provision made • Borrowing costs capitalised on qualifying assets to be disclosed
• Fixed Assets held for sale / retired from active use – to be stated as lower of NBV or NRV, to be shown separately • Intangible assets – remaining unamortised • useful life for significant intangible assets
Balance Sheet Non-current / Current Investments
• Investment in property ( cost model) and related depreciation to be disclosed separately • Trade investments and Other investments to be shown separately, • details to be disclosed include Whether quoted or un quoted • Each category (eg: equity shares, bonds, debentures, investment in partnership, MF etc.)
• Related entities – Subsidiary, JV • Quantity and face value / paid up value • Aggregate value of quoted investments
• Market value of quoted investments
Balance Sheet Inventories • Board classification to include – RM, WIP, FG, Traded goods, Stores and spares, loose tools • Within each classification composition of major category to be included, quantity not mandated only suggestive • Value of ‘In transit’ stock to be stated
• Any lien on inventories held to be disclosed
Balance Sheet Trade receivables
• Secured and unsecured to be clearly stated • Time based segregation – outstanding for a period of more than 6 months from the due date of payment to be disclosed • Recoverability – whether considered good or otherwise to be stated, if provision created toward recoverability disclosure = gross – provision • Dues from related parties to be disclosed separately
Balance Sheet Cash and Bank balances: Classification
• Cash on hand • Cheques on hand • Bank balances In current accounts • Demand deposits (less than 3 months maturity)
• Short term, highly liquid investments • Other bank balances • Deposits with maturity more than 3 months but less than 12 months
• Overdraft – cannot be offset against bank balance unless there is legal right with the company to do so ; appropriate to present under current liabilities
Other Notes Contingent liabilities • Claims against the Company not acknowledged as debts • Description and nature to be disclosed • In case of disputes, if deposits made under protest the same should not be netted off for presentation of contingent liability
• Capital and Other commitments
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