companies act 2006 presentation of financial statements

• Practical Law

Financial statements: Companies Act 2006 requirements

Practical law uk practice note 3-379-0743  (approx. 19 pages), get full access to this document with a free trial.

Try free and see for yourself how Practical Law resources can improve productivity, efficiency and response times.

About Practical Law

This document is from Thomson Reuters Practical Law, the legal know-how that goes beyond primary law and traditional legal research to give lawyers a better starting point. We provide standard documents, checklists, legal updates, how-to guides, and more.

650+ full-time experienced lawyer editors globally create and maintain timely, reliable and accurate resources across all major practice areas.

83% of customers are highly satisfied with Practical Law and would recommend to a colleague.

81% of customers agree that Practical Law saves them time.

• SRA accounts: practice compliance
• Monitor, review and audit
• Financial and Narrative Reporting
• File and information management

Schedule 3 of Companies Act, 2013 : General Instructions for Preparation of Balance Sheet and Statement of Profit and Loss of a Company

• Updated Till : August 27, 2024

SCHEDULE III[1] (See section 129) [Effective from 1st April, 2014] [2][Division I Financial Statements for a company whose Financial Statements are required to comply with the Companies (Accounting Standards) Rules, 2006. GENERAL INSTRUCTIONS FOR PREPARATION OF BALANCE SHEET AND STATEMENT OF PROFIT AND LOSS OF A COMPANY] General Instructions 1. Where compliance with the requirements […]

SCHEDULE III [1]

( See section 129)

[ Effective from 1st April, 2014 ]

[2] [Division I

Financial Statements for a company whose Financial Statements are required to comply with the Companies (Accounting Standards) Rules, 2006.

GENERAL INSTRUCTIONS FOR PREPARATION OF BALANCE SHEET AND STATEMENT OF PROFIT AND LOSS OF A COMPANY]

General Instructions

1. Where compliance with the requirements of the Act including Accounting Standards as applicable to the companies require any change in treatment or disclosure including addition, amendment, substitution or deletion in the head or sub-head or any changes, inter se, in the financial statements or statements forming part thereof, the same shall be made and the requirements of this Schedule shall stand modified accordingly.

2. The disclosure requirements specified in this Schedule are in addition to and not in substitution of the disclosure requirements specified in the Accounting Standards prescribed under the Companies Act, 2013. Additional disclosures specified in the Accounting Standards shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of the Financial Statements. Similarly, all other disclosures as required by the Companies Act shall be made in the notes to accounts in addition to the requirements set out in this Schedule.

3. (i) Notes to accounts shall contain information in addition to that presented in the Financial Statements and shall provide where required (a) narrative descriptions or disaggregations of items recognised in those statements; and (b) information about items that do not qualify for recognition in those statements.

(ii) Each item on the face of the Balance Sheet and Statement of Profit and Loss shall be cross-referenced to any related information in the notes to 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 not providing important information as a result of too much aggregation.

4. (i) Depending upon the turnover of the company, the figures appearing in the Financial Statements may be rounded off as given below:—

(ii) Once a unit of measurement is used, it [12] [should] be used uniformly in the Financial Statements.

5. Except in the case of the first Financial Statements laid before the Company (after its incorporation) the corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given.

6. For the purpose of this Schedule, the terms used herein shall be as per the applicable Accounting Standards.

Note:—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 industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Accounting Standards.

PART I — BALANCE SHEET

Name of the Company…………………….

Balance Sheet as at ………………………… [3]

(Rupees in…………)

See accompanying notes to the Financial Statements.

General Instructions for Preparation of Balance Sheet

1. An asset shall be classified as current when it satisfies any of the following criteria:—

(a)  it is expected to be realised in, or is intended for sale or consumption in, the company’s normal operating cycle;

(b)  it is held primarily for the purpose of being traded;

(c)   it is expected to be realised within twelve months after the reporting date; or

(d)  it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

All other assets shall be classified as non-current.

2. An operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Where the normal operating cycle cannot be identified, it is assumed to have a duration of twelve months.

3. A liability shall be classified as current when it satisfies any of the following criteria:—

(a)  it is expected to be settled in the company’s normal operating cycle;

(c)   it is due to be settled within twelve months after the reporting date; or

(d)  the company does not have an unconditional right to defer settlement of the liability for at least twelve 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 instruments do not affect its classification.

All other liabilities shall be classified as non-current.

4. A receivable shall be classified as a “trade receivable” if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business.

5. A payable shall be classified as a “trade payable” if it is in respect of the amount due on account of goods purchased or services received in the normal course of business.

6. A company shall disclose the following in the notes to accounts.

A. Share Capital

For each class of share capital (different classes of preference shares to be treated separately):

(a)  the number and amount of shares authorised;

(b)  the number of shares issued, subscribed and fully paid, and subscribed but not fully paid;

(c)   par value per share;

(d)  a reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period;

(e)   the rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital;

(f)   shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by or by subsidiaries or associates of the holding company or the ultimate holding company in aggregate;

(g)  shares in the company held by each shareholder holding more than 5 per cent. shares specifying the number of shares held;

(h)  shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment, including the terms and amounts;

(i)   for the period of five years immediately preceding the date as at which the Balance Sheet is prepared:

(A)   Aggregate number and class of shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash.

(B)   Aggregate number and class of shares allotted as fully paid-up by way of bonus shares.

(C)   Aggregate number and class of shares bought back.

(j)   terms of any securities convertible into equity/preference shares issued along with the earliest date of conversion in descending order starting from the farthest such date;

(k)   calls unpaid (showing aggregate value of calls unpaid by directors and officers);

(l)   forfeited shares (amount originally paid-up).

B. Reserves and Surplus

(i)   Reserves and Surplus shall be classified as:

(a)   Capital Reserves;

(b)   Capital Redemption Reserve;

(c)   Securities Premium [14] [***];

(d)   Debenture Redemption Reserve;

(e)   Revaluation Reserve;

(f)    Share Options Outstanding Account;

(g)   Other Reserves–(specify the nature and purpose of each reserve and the amount in respect thereof);

(h)   Surplus i.e., balance in Statement of Profit and Loss disclosing allocations and appropriations such as dividend, bonus shares and transfer to/from reserves, etc.;

(Additions and deductions since last balance sheet to be shown under each of the specified heads);

(ii)  A reserve specifically represented by earmarked investments shall be termed as a “fund”.

(iii)  Debit balance of statement of profit and loss shall be shown as a negative figure under the head “Surplus”. Similarly, the balance of “Reserves and Surplus”, after adjusting negative balance of surplus, if any, shall be shown under the head “Reserves and Surplus” even if the resulting figure is in the negative.

C. Long-Term Borrowings

(i)   Long-term borrowings shall be classified as:

(a)    Bonds/debentures;

(b)    Term loans:

(A)   from banks.

(B)   from other parties.

(c)    Deferred payment liabilities;

(d)    Deposits;

(e)    Loans and advances from related parties;

(f)     Long term maturities of finance lease obligations;

(g)    Other loans and advances (specify nature).

(ii)  Borrowings shall further be sub-classified as secured and unsecured. Nature of security shall be specified separately in each case.

(iii) Where loans have been guaranteed by directors or others, the aggregate amount of such loans under each head shall be disclosed.

(iv) Bonds/debentures (along with the rate of interest and particulars of redemption or conversion, as the case may be) shall be stated in descending order of maturity or conversion, starting from farthest redemption or conversion date, as the case may be. Where bonds/ debentures are redeemable by instalments, the date of maturity for this purpose must be reckoned as the date on which the first instalment becomes due.

(v)   Particulars of any redeemed bonds/debentures which the company has power to reissue shall be disclosed.

(vi) Terms of repayment of term loans and other loans shall be stated.

(vii) Period and amount of continuing default as on the balance sheet date in repayment of loans and interest, shall be specified separately in each case.

D. Other Long-term Liabilities

Other Long-term Liabilities shall be classified as:

(a)  Trade payables;

(b)  Others.

E. Long-term provisions

The amounts shall be classified as:

(a)  Provision for employee benefits;

(b)  Others (specify nature).

F. Short-term borrowings

(i)   Short-term borrowings shall be classified as:

(a)    Loans repayable on demand:

(b)    Loans and advances from related parties;

(c)    Deposits;

(d)    Other loans and advances (specify nature).

(iii)  Where loans have been guaranteed by directors or others, the aggregate amount of such loans under each head shall be disclosed.

(iv)   Period and amount of default as on the balance sheet date in repayment of loans and interest, shall be specified separately in each case.

[ 4] [FA. Trade Payable

The following details relating to Micro, Small and Medium Enterprises shall be disclosed in the notes:—

(a)  the principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier at the end of each accounting year;

(b)  the amount of interest paid by the buyer in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year;

(c)   the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006;

(d)  the amount of interest accrued and remaining unpaid at the end of each accounting year; and

(e)   the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006.

Explanation.-The terms ‘appointed day’, ‘buyer’, ‘enterprise’, ‘micro enterprise’, ‘small enterprise’ and’ supplier’, shall have the same meaning assigned to those under clauses (b), (d), (e), (h), (m) and (n) respectively of section 2 of the Micro, Small and Medium Enterprises Development Act, 2006.]

G. Other current liabilities

(a)  Current maturities of long-term debt;

(b)  Current maturities of finance lease obligations;

(c)   Interest accrued but not due on borrowings;

(d)  Interest accrued and due on borrowings;

(e)   Income received in advance;

(f)   Unpaid dividends;

(g)  Application money received for allotment of securities and due for refund and 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 before which shares shall be allotted shall be disclosed. It shall also be disclosed 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 beyond the period for allotment as mentioned in the document inviting application for shares along with the reason for such share application money being pending shall be disclosed. Share application money not exceeding the issued capital and 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, shall be separately shown under “Other current liabilities”;

(h)  Unpaid matured deposits and interest accrued thereon;

(i)   Unpaid matured debentures and interest accrued thereon;

(j)   Other payables (specify nature).

H. Short-term provisions

(a)  Provision for employee benefits.

I. Tangible assets

(i)   Classification shall be given as:

(a)   Land;

(b)   Buildings;

(c)   Plant and Equipment;

(d)   Furniture and Fixtures;

(e)   Vehicles;

(f)    Office equipment;

(g)   Others (specify nature).

(ii)  Assets under lease shall be separately specified under each class of asset.

(iii)  A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately.

(iv)   Where sums have been written-off on a reduction of capital or revaluation of assets or where sums have been added on revaluation of assets, every balance sheet subsequent to date of such write-off, or addition shall show the reduced or increased figures as applicable and shall by way of a note also show the amount of the reduction or increase as applicable together with the date thereof for the first five years subsequent to the date of such reduction or increase.

J. Intangible assets

(a)   Goodwill;

(b)   Brands/trademarks;

(c)   Computer software;

(d)   Mastheads and publishing titles;

(e)   Mining rights;

(f)    Copyrights, and patents and other intellectual property rights, services and operating rights;

(g)   Recipes, formulae, models, designs and prototypes;

(h)   Licences and franchise;

(i)   Others (specify nature).

(ii)  A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related amortization and impairment losses/reversals shall be disclosed separately.

(iii) Where sums have been written-off on a reduction of capital or revaluation of assets or where sums have been added on revaluation of assets, every balance sheet subsequent to date of such write-off, or addition shall show the reduced or increased figures as applicable and shall by way of a note also show the amount of the reduction or increase as applicable together with the date thereof for the first five years subsequent to the date of such reduction or increase.

K. Non-current investments

(i)   Non-current investments shall be classified as trade investments and other investments and further classified as:

(a)   Investment property;

(b)   Investments in Equity Instruments;

(c)   Investments in preference shares;

(d)   Investments in Government or trust securities;

(e)   Investments in debentures or bonds;

(f)    Investments in Mutual Funds;

(g)   Investments in partnership firms;

(h)   Other non-current investments (specify nature).

Under each classification, details shall be given of names of the bodies corporate indicating separately whether such bodies are (i) subsidiaries, (ii) associates, (iii) joint ventures, or (iv) controlled special purpose entities in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly-paid). In regard to investments in the capital of partnership firms, the names of the firms (with the names of all their partners, total capital and the shares of each partner) shall be given.

(ii)  Investments carried at other than at cost should be separately stated specifying the basis for valuation thereof;

(iii) The following shall also be disclosed:

(a)     Aggregate amount of quoted investments and market value thereof;

(b)     Aggregate amount of unquoted investments;

(c)      Aggregate provision for diminution in value of investments.

L. Long-term loans and advances

(i)   Long-term loans and advances shall be classified as:

(a)     Capital Advances;

(b)     Security Deposits;

(c)      Loans and advances to related parties (giving details thereof);

(d)     Other loans and advances (specify nature).

(ii)  The above shall also be separately sub-classified as:

(a)     Secured, considered good;

(b)     Unsecured, considered good;

(c)      Doubtful.

(iii)  Allowance for bad and doubtful loans and advances shall be disclosed under the relevant heads separately.

(iv) Loans and advances due by directors or other officers of the company or any of them either severally or jointly with any other persons or amounts due by firms or private companies respectively in which any director is a partner or a director or a member should be separately stated.

M. Other non-current assets

Other non-current assets shall be classified as:

(i)   Long-term Trade Receivables (including trade receivables on deferred credit terms);

(ii)  Others (specify nature);

(iii) Long term Trade Receivables, shall be sub-classified as:

(A)     (a) Secured, considered good;

(B)     Unsecured, considered good;

(C)     Doubtful.

(b)    Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately.

(c)    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 member should be separately stated.

N. Current Investments

(i)   Current investments shall be classified as:

(a)     Investments in Equity Instruments;

(b)     Investment in Preference Shares;

(c)      Investments in Government or trust securities;

(d)     Investments in debentures or bonds;

(e)      Investments in Mutual Funds;

(f)      Investments in partnership firms;

(g)     Other investments (specify nature).

Under each classification, details shall be given of names of the bodies corporate [indicating separately whether such bodies are: (i) subsidiaries, (ii) associates, (iii) joint ventures, or (iv) controlled special purpose entities] in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly paid). In regard to investments in the capital of partnership firms, the names of the firms (with the names of all their partners, total capital and the shares of each partner) shall be given.

(ii)  The following shall also be disclosed:

(a)   The basis of valuation of individual investments;

(b)   Aggregate amount of quoted investments and market value thereof;

(c)   Aggregate amount of unquoted investments;

(d)   Aggregate provision made for diminution in value of investments.

O. Inventories

(i)   Inventories shall be classified as:

(a)   Raw materials;

(b)   Work-in-progress;

(c)   Finished goods;

(d)   Stock-in-trade (in respect of goods acquired for trading);

(e)   Stores and spares;

(f)    Loose tools;

(ii)  Goods-in-transit shall be disclosed under the relevant sub-head of inventories.

(iii) Mode of valuation shall be stated.

P. Trade Receivables

(i)   Aggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment should be separately stated.

(ii)  Trade receivables shall be sub-classified as:

(a)   Secured, considered good;

(b)   Unsecured, considered good;

(c)   Doubtful.

(iii)  Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately.

(iv)   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 member should be separately stated.

Q. Cash and cash equivalents

(i)   Cash and cash equivalents shall be classified as:

(a)   Balances with banks;

(b)   Cheques, drafts on hand;

(c)   Cash on hand;

(d)   Others (specify nature).

(ii)  Earmarked balances with banks (for example, for unpaid dividend) shall be separately stated.

(iii)  Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments shall be disclosed separately.

(iv)   Repatriation restrictions, if any, in respect of cash and bank balances shall be separately stated.

(v)   Bank deposits with more than twelve months maturity shall be disclosed separately.

R. Short-term loans and advances

(i)   Short-term loans and advances shall be classified as:

(a)   Loans and advances to related parties (giving details thereof);

(b)   Others (specify nature).

(ii)  The above shall also be sub-classified as:

(iii) Allowance for bad and doubtful loans and advances shall be disclosed under the relevant heads separately.

(iv) Loans and advances due by directors or other officers of the company or any of them either severally or jointly with any other person or amounts due by firms or private companies respectively in which any director is a partner or a director or a member shall be separately stated.

S. Other current assets (specify nature)

This is an all-inclusive heading, which incorporates current assets that do not fit into any other asset categories.

T. Contingent liabilities and commitments (to the extent not provided for)

(i)   Contingent liabilities shall be classified as:

(a)   Claims against the company not acknowledged as debt;

(b)   Guarantees;

(c)   Other money for which the company is contingently liable.

(ii)  Commitments shall be classified as:

(a)   Estimated amount of contracts remaining to be executed on capital account and not provided for;

(b)   Uncalled liability on shares and other investments partly paid;

(c)   Other commitments (specify nature).

U. The amount of dividends proposed to be distributed to equity and preference shareholders for the period and the related amount per share shall be disclosed separately. Arrears of fixed cumulative dividends on preference shares shall also be disclosed separately.

V. Where in respect of an issue of securities made for a specific purpose, the whole or part of the amount has not been used for the specific purpose at the balance sheet date, there shall be indicated by way of note how such unutilised amounts have been used or invested.

W. If, in the opinion of the Board, any of the assets other than [15] [Property, Plant and Equipment] and non-current investments do not have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, the fact that the Board is of that opinion, shall be stated.

[ X. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 as provided in the Table below:-

Explanation : For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”] [11]

PART II – STATEMENT OF PROFIT AND LOSS

Profit and loss statement for the year ended ………………………

(Rupees in …………)

See accompanying notes to the financial statements.

General Instructions for Preparation of Statement of Profit and Loss

1. The provisions of this Part shall apply to the income and expenditure account referred to in sub-clause (ii) of clause (40) of section 2 in like manner as they apply to a statement of profit and loss.

2. (A) In respect of a company other than a finance company revenue from operations shall disclose separately in the notes revenue from—

(a)  Sale of products;

(b)  Sale of services;

(c)   Other operating revenues;

(d)  Excise duty.

(B) In respect of a finance company, revenue from operations shall include revenue from—

(a)  Interest; and

(b)  Other financial services.

Revenue under each of the above heads shall be disclosed separately by way of notes to accounts to the extent applicable.

3. Finance Costs

Finance costs shall be classified as:

(a)  Interest expense;

(b)  Other borrowing costs;

(c)   Applicable net gain/loss on foreign currency transactions and translation.

4. Other income

Other income shall be classified as:

(a)  Interest Income (in case of a company other than a finance company);

(b)  Dividend Income;

(c)   Net gain/loss on sale of investments;

(d)  Other non-operating income (net of expenses directly attributable to such income).

5. Additional Information

A Company shall disclose by way of notes additional information regarding aggregate expenditure and income on the following items:—

(i)   (a) Employee Benefits Expense [showing separately (i) salaries and wages, (ii) contribution to provident and other funds, (iii) expense on Employee Stock Option Scheme (ESOP) and Employee Stock Purchase Plan (ESPP), (iv) staff welfare expenses].

(b)   Depreciation and amortisation expense;

(c)   Any item of income or expenditure which exceeds one per cent. of the revenue from operations or `1,00,000, whichever is higher;

(d)   Interest Income;

(e)   Interest expense;

(f)    Dividend income;

(g)   Net gain/loss on sale of investments;

(h)   Adjustments to the carrying amount of investments;

(i)    Net gain or loss on foreign currency transaction and translation (other than considered as finance cost);

(j)    Payments to the auditor as (a) auditor; (b) for taxation matters; (c) for company law matters; (d) for management services; (e) for other services; and (f) for reimbursement of expenses;

(k)   In case of Companies covered under section 135, amount of expenditure incurred on corporate social responsibility activities;

(l)    Details of items of exceptional and extraordinary nature;

(m)  Prior period items;

(ii)  [5] [(a)     In the case of manufacturing companies,—

(1)    Raw materials under broad heads.

(2)    goods purchased under broad heads.]

(b)   In the case of trading companies, purchases in respect of goods traded in by the company under broad heads.

(c)   In the case of companies rendering or supplying services, gross income derived from services rendered or supplied under broad heads.

(d)   In the case of a company, which falls under more than one of the categories mentioned in (a), (b) and (c) above, it shall be sufficient compliance with the requirements herein if purchases, sales and consumption of raw material and the gross income from services rendered is shown under broad heads.

[6 ] [(e)  In the case of other companies, gross income derived under broad heads.

(iii)    In the case of all concerns having works-in-progress, works-in-progress under broad heads.]

(iv)    (a) The aggregate, if material, of any amounts set aside or proposed to be set aside, to reserve, but not including provisions made to meet any specific liability, contingency or commitment known to exist at the date as to which the balance sheet is made up.

(b)  The aggregate, if material, of any amounts withdrawn from such reserves.

(v)      (a) The aggregate, if material, of the amounts set aside to provisions made for meeting specific liabilities, contingencies or commitments.

(b)  The aggregate, if material, of the amounts withdrawn from such provisions, as no longer required.

(vi)    Expenditure incurred on each of the following items, separately for each item:—

(a)   Consumption of stores and spare parts;

(b)   Power and fuel;

(c)   Rent;

(d)   Repairs to buildings;

(e)   Repairs to machinery;

(f)    Insurance;

(g)   Rates and taxes, excluding, taxes on income;

(h)   Miscellaneous expenses,

(vii) (a)   Dividends from subsidiary companies.

(b)   Provisions for losses of subsidiary companies.

[7] [(viii)  The profit and loss account shall also contain by way of a note the following information, namely:—

(a)  Value of imports calculated on C.I.F basis by the company during the financial year in respect of—

I. Raw materials;

II. Components and spare parts;

III. Capital goods;

(b)  Expenditure in foreign currency during the financial year on account of royalty, know-how, professional and consultation fees, interest, and other matters;

(c)   Total value if all imported raw materials, spare parts and components consumed during the financial year and the total value of all indigenous raw materials, spare parts and components similarly consumed and the percentage of each to the total consumption;]

(d)  The amount remitted during the year in foreign currencies on account of dividends with a specific mention of the total number of non-resident shareholders, the total number of shares held by them on which the dividends were due and the year to which the dividends related;

[8] [(e)  Earnings in foreign exchange classified under the following heads, namely:—

I. Export of goods calculated on F.O.B. basis;

II. Royalty, know-how, professional and consultation fees;

III. Interest and dividend;

IV. Other income, indicating the nature thereof.]

Note:—Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements.

General Instructions for the Preparation of Consolidated Financial Statements

1. Where a company is required to prepare Consolidated Financial Statements, i.e., consolidated balance sheet and consolidated statement of profit and loss, the company shall mutatis mutandis follow the requirements of this Schedule as applicable to a company in the preparation of balance sheet and statement of profit and loss. In addition, the consolidated financial statements shall disclose the information as per the requirements specified in the applicable Accounting Standards including the following:

(i)   Profit or loss attributable to “minority interest” and to owners of the parent in the statement of profit and loss shall be presented as allocation for the period.

(ii)  “Minority interests” in the balance sheet within equity shall be presented separately from the equity of the owners of the parent.

2. In Consolidated Financial Statements, the following shall be disclosed by way of additional information:

3. All subsidiaries, associates and joint ventures (whether Indian or foreign) will be covered under consolidated financial statements.

4. An entity shall disclose the list of subsidiaries or associates or joint ventures which have not been consolidated in the consolidated financial statements along with the reasons of not consolidating.

1. Schedule III of the 2013 Act deals with instructions for prepation of Balance Sheet and Profit and Loss of account of a company under section 129 of the 2013 act. Schedule III also provides for the instructions for prepation of Consolidated Financial Statements to be filed by holding companies in corporating the financial statements of its subsidiaries.

2. Schedule III of the 2013 Act corresponds to Schedule VI of the 1956 Act. See also Schedule VI of the 1956 Act.

3. See also section 129 of the 2013 Act for commentary on Schedule III of the 2013 Act. It will also be relevant to refer to Rule VI of the Companies (Accounts) Rules, 2014.

[9] [ Division II

 Financial Statements for a company whose financial statements are drawn up in compliance of the Companies (Indian Accounting Standards) Rules, 2015.

GENERAL INSTRUCTIONS FOR PREPARATION OF FINANCIAL STATEMENTS  OF A COMPANY REQUIRED TO COMPLY WITH Ind AS

1. Every company to which India Accounting Standards apply, shall prepare its financial statements in accordance with this Schedule or with such modification as may be required under certain circumstances

2. Where compliance with the requirements of the Act including Indian Accounting Standards (except the opinion of presenting assets and liabilities in the order of liquidity as provided by the relevant Ind AS  as applicable to the companies require any change in treatment or disclosure including addition, amendment, substitution or deletion in the head or sub-head or any changes, inter se , in the financial statements or statements forming part thereof, the same shall be made and the requirements under this Schedule shall stand modified accordingly.

3. The disclosure requirements specified in this Schedule are in addition to and not in substitution of the disclosure requirements specified in the Indian Accounting Standards. Additional disclosures specified in the Indian Accounting Standards shall be made in the notes or by way of additional statement or statements unless required to be disclosed on the face of the Financial Statements. Similarly, all other disclosures as required by the Companies Act, 2013 shall be made in the notes to accounts in addition to the requirements set out in this Schedule.

4. ( i ) Notes shall contain information in addition to that presented in the Financial Statements and shall provide where required-

( a ) narrative descriptions or disaggregations of items recognised in those statements; and

( b ) information about items that do not qualify for recognition in those statements.

( ii ) Each item on the face of the Balance Sheet, Statement of Changes in Equity and Statement of Profit and Loss shall be cross-referenced to any related information in the notes. In preparing the Financial Statements including the notes, a balance shall be maintained between providing excessive detail that may not assist users of Financial Statements and not providing important information as a result of too much aggregation.

5. Depending upon the turnover of the company, the figures appearing in the Financial Statements shall be rounded off as below:—

Once a unit of measurement is used, it should be used uniformly in the Financial Statements.

6. Financial Statements shall contain the corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes except in the case of first Financial Statements laid before the company after incorporation.

7. Financial Statements shall disclose all ‘material’ items, i.e, the items if they could, individually or collectively, influence the economic decisions that users make on the basis of the financial statements. Materiality depends on the size or nature of the item or a combination of both, to be judged in the particular circumstances.

8. For the purpose of this Schedule, the terms used herein shall have the same meanings assigned to them in Indian Accounting Standards.

9. Where any Act or Regulation requires specific disclosures to be made in  the stand alone financial statements of a company, the said disclosures shall be made in addition to those required under this Schedule.

Note: —This Schedule sets out the minimum requirements for disclosure on the face of the Financial Statements, i.e, Balance Sheet, Statement of Changes in Equity for the period, the Statement of profit and Loss for the period (The term ‘Statement of Profit and Loss’ has the same meaning as ‘profit and Loss Account’) and Notes. Cash flow statement shall be prepared, where applicable, in accordance with requirements of the relevant Indian Accounting Standard.

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 industry or sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act, 2013 or under the Indian Accounting Standards.

Balance Sheet as at ………………………

See accompanying notes to the Financial Statements.  

STATEMENT OF CHANGES IN EQUITY

Name of the Company…………………………..

Statement of Changes in equity for the period ended…………………………

(Rupees in…………….)

A. Equity Share Capital

B. Other Equity

Note: Remeasurement of defined benefit plans and fair value changes to own credit risk of financial liabilities designated at fair value through profit or loss shall be recognised as a part of retained earnings with separate disclosure of such items alongwith the relevant amounts in the Notes.

GENERAL INSTRUCTIONS FOR PREPARATION OF BALANCE SHEET

1. An entity shall classify an asset as current when-

(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;

(b) it holds the asset primarily for the purpose of trading;

(c) it expects to realise the asset within twelve months after the reporting period; or

(d) 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

An entity shall classify all other assets as non-current.

2. The operating cycle of an entity is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. When the entity’s normal operating cycle is not clearly identifiable, it is assumed to be twelve months.

3. An entity shall classify a liability as current when-

(a) it expects to settle the liability in its normal operating cycle;

(b) it holds the liability primarily for the purpose of trading;

(c) the liability is due to be settled within twelve months after the reporting period; or

(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

An entity shall classify all other liabilities as non-current.

4. A receivable shall be classified as a ‘trade receivable’ if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business.

5. A payable shall be classified as a ‘trade payable’ if it is in respect of the amount due on account of goods purchased or services received in the normal course of business.

6. A company shall disclose the following in the Notes:

A. Non-Current Assets

I. Property, Plant and Equipment :

(i) Classification shall be given as:

(b) Buildings

(c) Plant and Equipment

(d) Furniture and Fixtures

(e) Vehicles

(f) Office equipment

(g) Bearer Plants

(h) Others (specify nature)

(ii) Assets under lease shall be separately specified under each class of assets.

(iii) A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses or reversals shall be disclosed separately.

II. Investment Property:

A reconciliation of the gross and net carrying amounts of each class of property at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses or reversals shall be disclosed separately.

III. Goodwill:

A reconciliation of the gross and net carrying amount of goodwill at the beginning and end of the reporting period showing additions, impairments, disposals and other adjustments.

IV. Other Intangible assets:

(i) Classification shall be given as:

(a) Brands or trademarks

(b) Computer software

(c) Mastheads and publishing titles

(d) Mining rights

(e) Copyrights, patents, other intellectual property rights, services and operating rights

(f) Recipes, formulae, models, designs and prototypes

(g) Licenses and franchises

(ii) A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related amortization and impairment losses or reversals shall be disclosed separately.

V. Biological Assets other than bearer plants:

A reconciliation of the carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments shall be disclosed separately.

VI. Investments:

(i) Investments shall be classified as:

(a) Investments in Equity Instruments;

(b) Investments in Preference Shares;

(c) Investments in Government or trust securities;

(d) Investments in debentures or bonds;

(e) Investments in Mutual Funds;

(f) Investments in partnership firms; or

(g) Other investments (specify nature).

Under each classification, details shall be given of names of the bodies corporate that are-

(i) subsidiaries,

(ii) associates,

(iii) joint ventures, or

(iv) structured entities,

in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly-paid). Investments in partnership firms alongwith names of the firms, their partners, total capital and the shares of each partner shall be disclosed separately.

(ii) The following shall also be disclosed:

(a) Aggregate amount of quoted investments and market value thereof;

(b) Aggregate amount of unquoted investments; and

(c) Aggregate amount of impairment in value of investments.

VII. Trade Receivables:

(i) Trade receivables shall be sub-classified as:

(a) Secured, considered good;

(b) Unsecured considered good; and

(c) Doubtful.

(ii) Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately.

(iii) 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 member should be separately stated.

VIII. Loans:

(i) Loans shall be classified as-

(a) Security Deposits;

(b) Loans to related parties (giving details thereof); and

(c) Other loans (specify nature).

(ii) The above shall also be separately sub-classified as-

(b) Unsecured, considered good; and

(iii) Allowance for bad and doubtful loans shall be disclosed under the relevant heads separately.

(iv) Loans due by directors or other officers of the company or any of them either severally or jointly with any other persons or amounts due by firms or private companies respectively in which any director is a partner or a director or a member should be separately stated.

IX. Bank deposits with more than 12 months maturity shall be disclosed under ‘Other financial assets’;

X. Other non-current assets: Other non-current assets shall be classified as-

(i) Capital Advances; and

(ii) Advances other than capital advances;

(1) Advances other than capital advances shall be classified as:

(b) Advances to related parties (giving details thereof); and

(c) Other advances (specify nature).

(2) Advances to directors or other officers of the company or any of them either severally or jointly with any other persons or advances to firms or private companies respectively in which any director is a partner or a director or a member should be separately stated. In case advances are of the nature of a financial asset as per relevant Ind AS, these are to be disclosed under ‘other financial assets’ separately.

(iii) Others (specify nature).

B. Current Assets

I. Inventories:

(i) Inventories shall be classified as-

(a) Raw materials;

(b) Work-in-progress;

(c) Finished goods;

(d) Stock-in-trade (in respect of goods acquired for trading);

(e) Stores and spares;

(f) Loose tools; and

(g) Others (specify nature).

(ii) Goods-in-transit shall be disclosed under the relevant sub-head of inventories.

(iii) Mode of valuation shall be stated.

II. Investment

(i) Investments shall be classified as-

(b) Investment in Preference Shares;

(c) Investments in government or trust securities;

(f) Investments in partnership firms; and

(a) subsidiaries,

(b) associates,

(c) joint ventures, or

(d) structured entities,

in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly-paid).

(ii) The following shall also be disclosed-

(b) Aggregate amount of unquoted investments;

III. Trade Receivables:

(iii) 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 member should be separately stated.

IV. Cash and cash equivalents: Cash and cash equivalents shall be classified as-

a. Balances with Banks (of the nature of cash and cash equivalents);

b. Cheques, drafts on hand;

c. Cash on hand; and

d. Others (specify nature).

(i) Loans shall be classified as:

(a) Security deposits;

(c) Others (specify nature).

(ii) The above shall also be sub-classified as-

(c) Doubtful

(iii)   Allowance for bad and doubtful loans shall be disclosed under the relevant heads separately.

(iv) Loans due by directors or other officers of the company or any of them either severally or jointly with any other person or amounts due by firms or private companies respectively in which any director is a partner or a director or a member shall be separately stated.

VI. Other current assets (specify nature): This is an all-inclusive heading, which incorporates current assets that do not fit into any other asset categories. Other current assets shall be classified as-

(i) Advances other than capital advances

(b) Advances to related parties (giving details thereof);

(2) Advances to directors or other officers of the company or any of them either severally or jointly with any other persons or advances to firms or private companies respectively in which any director is a partner or a director or a member should be separately stated.

(ii) Others (specify nature)

C. Cash and Bank balances: The following disclosures with regard to cash and bank balances shall be made:

(a) Earmarked balances with banks (for example, for unpaid dividend) shall be separately stated.

(b) Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments shall be disclosed

(c) Repatriation restrictions, if any, in respect of cash and bank balances shall be separately stated.

I. Equity Share Capital: For each class of equity share capital:

(a) the number and amount of shares authorised;

(b) the number of shares issued, subscribed and fully paid, and subscribed but not fully paid;

(c) par value per share;

(d) a reconciliation of the number of shares outstanding at the beginning and at the end of the period;

(e) the rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital;

(f) shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by subsidiaries or associates of the holding company or the ultimate holding company in aggregate;

(g) shares in the company held by each shareholder holding more than five per cent. shares specifying the number of shares held;

(h) shares reserved for issue under options and contracts or commitments for the sale of shares or disinvestment, including the terms and amounts;

(i) for the period of five years immediately preceding the date at which the Balance Sheet is prepared-

– aggregate number and class of shares allotted as fully paid up pursuant to contract without payment being received in cash;

– aggregate number and class of shares allotted as fully paid up by way of bonus shares; and

– aggregate number and class of shares bought back;

(j) terms of any securities convertible into equity shares issued along with the earliest date of conversion in descending order starting from the farthest such date;

(k) calls unpaid (showing aggregate value of calls unpaid by directors and officers);

(l) forfeited shares (amount originally paid up).

II. Other Equity:

(i) ‘Other Reserves’ shall be classified in the notes as-

(a) Capital Redemption Reserve;

(b) Debenture Redemption Reserve;

(c) Share Options Outstanding Account; and

(d) Others— (specify the nature and purpose of each reserve and the amount in respect thereof);

(Additions and deductions since last balance sheet to be shown under each of the specified heads)

(ii) Retained Earnings represents surplus i.e. balance of the relevant column in the Statement of Changes in Equity;

(iii) A reserve specifically represented by earmarked investments shall disclose the fact that it is so represented;

(iv) Debit balance of Statement of Profit and Loss shall be shown as a  negative figure under the head ‘retained earnings’. Similarly, the balance of ‘Other Equity’, after adjusting negative balance of retained earnings, if any, shall be shown under the head ‘Other Equity’ even if the resulting figure is in the negative; and

(v) Under the sub-head ‘Other Equity’, disclosure shall be made for the nature and amount of each item.

E. Non-Current Liabilities

I. Borrowings:

(i) borrowings shall be classified as-

(a) Bonds or debentures

(b) Term loans

(I) from banks

(II) from other parties

(c) Deferred payment liabilities

(d) Deposits

(e) Loans from related parties

(f) Long term maturities of finance lease obligations

(g) Liability component of compound financial instruments

(h) Other loans (specify nature);

(ii) borrowings shall further be sub-classified as secured and unsecured. Nature of security shall be specified separately in each case.

(iii) where loans have been guaranteed by directors or others, the aggregate amount of such loans under each head shall be disclosed;

(iv) bonds or debentures (along with the rate of interest, and particulars of redemption or conversion, as the case may be) shall be stated in descending order of maturity or conversion, starting from farthest redemption or conversion date, as the case may be. Where bonds/debentures are redeemable by installments, the date of maturity for this purpose must be reckoned as the date on which the first installment becomes due;

(v) particulars of any redeemed bonds or debentures which the company has power to reissue shall be disclosed;

(vi) terms of repayment of term loans and other loans shall be stated; and

(vii) period and amount of default as on the balance sheet date in repayment of borrowings and interest shall be specified separately in each case.

III. Provisions: The amounts shall be classified as-

(a) Provision for employee benefits; and

(b) Others (specify nature),

IV. Other non-current liabilities:

(a) Advances; and

(b) Others (specify nature).

F. Current Liabilities

I. Borrowings :

(i) Borrowings shall be classified as-

(a) Loans repayable on demand

(b) Loans from related parties

(c) Deposits

(d) Other loans (specify nature);

(ii) borrowings shall further be sub-classified as secured and unsecured. Nature of security shall be specified separately in each case;

(iv) period and amount of default as on the balance sheet date in repayment of borrowings and interest, shall be specified separately in each case.

II. Other Financial Liabilities: Other Financial liabilities shall be classified as-

(a) Current maturities of long-term debt;

(b) Current maturities of finance lease obligations;

(c) Interest accrued;

(d) Unpaid dividends;

(e) Application money received for allotment of securities to the extent refundable and interest accrued thereon;

(f) Unpaid matured deposits and interest accrued thereon;

(g) Unpaid matured debentures and interest accrued thereon; and

(h) Others (specify nature).

‘Long term debt’ is a borrowing having a period of more than twelve months at the time of origination

III. Other current liabilities:

The amounts shall be classified as-

(a) revenue received in advance;

(b) other advances (specify nature); and

(c) others (specify nature);

IV. Provisions: The amounts shall be classified as-

(i) provision for employee benefits; and

(ii) others (specify nature).

G. The presentation of liabilities associated with group of assets classified as held for sale and non-current assets classified as held for sale shall be in accordance with the relevant Indian Accounting Standards (Ind ASs).

H. Contingent Liabilities and Commitments:

(to the extent not provided for)

(i) Contingent Liabilities shall be classified as-

(a) claims against the company not acknowledged as debt;

(b) guarantees excluding financial guarantees; and

(c) other money for which the company is contingently liable.

(ii) Commitments shall be classified as-

(a) estimated amount of contracts remaining to be executed on capital account and not provided for;

(b) uncalled liability on shares and other investments partly paid; and

(c) other commitments (specify nature).

I. The amount of dividends proposed to be distributed to equity and preference shareholders for the period and the related amount per share shall be disclosed separately. Arrears of fixed cumulative dividends on irredeemable preference shares shall also be disclosed separately.

J. Where in respect of an issue of securities made for a specific purpose the whole or part of amount has not been used for the specific purpose at the Balance Sheet date, there shall be indicated by way of note how such unutilised amounts have been used or invested.

7. When a company applies an accounting policy retrospectively or makes a restatement of items in the financial statements or when it reclassifies items in its financial statements, the company shall attach to the Balance Sheet, a “Balance Sheet” as at the beginning of the earliest comparative period presented.

8. Share application money pending allotment shall be classified into equity or liability in accordance with relevant Indian Accounting Standards. Share application money to the extent not refundable shall be shown under the head Equity and share application money to the extent refundable shall be separately shown under ‘Other financial liabilities’.

9. Preference shares including premium received on issue, shall be classified and presented as ‘Equity’ or ‘Liability’ in accordance with the requirements of the relevant Indian Accounting Standards. Accordingly, the disclosure and presentation requirements in this regard applicable to the relevant class of equity or liability shall be applicable mutatis mutandis to the preference shares. For instance, redeemable preference shares shall be classified and presented under ‘non-current liabilities’ as ‘borrowings’ and the disclosure requirements in this regard applicable to such borrowings shall be applicable mutatis mutandis to redeemable preference shares.

10. Compound financial instruments such as convertible debentures, where split into equity and liability components, as per the requirements of the relevant Indian Accounting Standards, shall be classified and presented under the relevant heads in ‘Equity’ and ‘Liabilities’

11. Regulatory Deferral Account Balances shall be presented in the Balance Sheet in accordance with the relevant Indian Accounting Standards.

[ K. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8/11/2016 to 30/12/2016 as provided in the Table below:—

Explanation : For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”] [10]

   PART II – STATEMENT OF PROFIT AND LOSS

See accompanying notes to the financial statements

GENERAL INSTRUCTIONS FOR PREPARATION OF STATEMENT OF PROFIT AND LOSS

1. The provisions of this Part shall apply to the income and expenditure account, in like   manner as they apply to a Statement of Profit and Loss.

2. The Statement of Profit and Loss shall include:

(1) Profit or loss for the period;

(2) Other Comprehensive Income for the period.

The sum of (1) and (2) above is ‘Total Comprehensive Income’.

3. Revenue from operations shall disclose separately in the notes

(a) sale of products (including Excise Duty);

(b) sale of services; and

(c) other operating revenues.

4. Finance Costs: Finance costs shall be classified as-

(a) interest;

(b) dividend on redeemable preference shares;

(c) exchange differences regarded as an adjustment to borrowing costs; and

(d) other borrowing costs (specify nature).

5. Other income: Other income shall be classified as-

(a) interest Income;

(b) dividend Income; and

(c) other non-operating income (net of expenses directly attributable to such income).

6. Other Comprehensive Income shall be classified into-

(A)  Items that will not be reclassified to profit or loss

(i) Changes in revaluation surplus;

(ii) Remeasurements of the defined benefit plans;

(iii) Equity Instruments through Other Comprehensive Income;

(iv) Fair value changes relating to own credit risk of financial liabilities designated at fair value through profit or loss;

(v) Share of Other Comprehensive Income in Associates and Joint Ventures, to the extent not to be classified into profit or loss; and

(vi) Others (specify nature).

(B)   Items that will be reclassified to profit or loss;

(i) Exchange differences in translating the financial statements of a foreign operation;

(ii) Debt Instruments through Other Comprehensive Income;

(iii) The effective portion of gains and loss on hedging instruments in a cash flow hedge;

(iv) Share of Other Comprehensive Income in Associates and Joint Ventures, to the extent to be classified into profit or loss; and

(v) Others (specify nature).

7. Additional Information: A Company shall disclose by way of notes, additional information regarding aggregate expenditure and income on the following items:

(a) employee Benefits expense [showing separately (i) salaries and wages, (ii) contribution to provident and other funds, (iii) share based payments to employees, (iv) staff welfare expenses].

(b) depreciation and amortisation expense;

(c) any item of income or expenditure which exceeds one per cent of the revenue from operations or Rs.10,00,000, whichever is higher, in addition to the consideration of ‘materiality’ as specified in clause 7 of the General Instructions for Preparation of Financial Statements of a Company;

(d) interest Income;

(e) interest Expense;

(f) dividend income;

(g) net gain or loss on sale of investments;

(h) net gain or loss on foreign currency transaction and translation (other than considered as finance cost);

(i) payments to the auditor as (a) auditor, (b) for taxation matters, (c) for company law matters, (d) for other services, (e) for reimbursement of expenses;

(j) in case of companies covered under section 135, amount of expenditure incurred on corporate social responsibility activities; and

(k) details of items of exceptional nature;

8. Changes in Regulatory Deferral Account Balances shall be presented in the Statement of Profit and Loss in accordance with the relevant Indian Accounting Standards.

PART III- GENERAL INSTRUCTIONS FOR THE PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

1. Where a company is required to prepare Consolidated Financial Statements, i.e., consolidated balance sheet, consolidated statement of changes in equity and consolidated statement of profit and loss, the company shall mutates mutandis follow the requirements of this Schedule as applicable to a company in the preparation of balance sheet, statement of changes in equity and statement of profit and loss. In addition, the consolidated financial statements shall disclose the information as per the requirements specified in the applicable Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules 2015, including the following, namely:-

(i) Profit or loss attributable to ‘non-controlling interest’ and to ‘owners of the parent’ in the statement of profit and loss shall be presented as allocation for the period. Further, ‘total comprehensive income’ for the period attributable to ‘non-controlling interest’ and to ‘owners of the parent’ shall be presented in the statement of profit and loss as allocation for the period. The aforesaid disclosures for ‘total comprehensive income’ shall also be made in the statement of changes in equity. In addition to the disclosure requirements in the Indian Accounting Standards, the aforesaid disclosures shall also be made in respect of ‘other comprehensive income’.

(ii) ‘Non-controlling interests’ in the Balance Sheet and in the Statement of Changes in Equity, within equity, shall be presented separately from the equity of the ‘owners of the parent’,

(iii) Investments accounted for using the equity method.

4. An entity shall disclose the list of subsidiaries or associates or joint ventures which have not been consolidated in the consolidated financial statements along with the reasons of not consolidating.]

RELEVANT CIRCULARS

Commencement of provisions of the Companies Act, 2013 with regard to maintenance of books of accounts and preparations/adoption/filing of financial statements, auditors report.  Board’s report and attachments to such statements and reports- Applicability with regard to relevant financial year

General Circular 08/2014 dated 04.04.2014

A number of provisions of the Companies Act, 2013 including those relating to maintenance of books of account, preparation, adoption & filing of financial statements (and documents required to be attached thereto), Auditors reports and the Board of Directors report (Board’s report) have been brought into force with effect from 1st April, 2014. Provisions of Schedule II (Useful lives to compute depreciation) and Schedule III (Format of financial statements) have also been brought into force from that date. The relevant Rules pertaining to these provisions have also been notified, placed on the website of the Ministry and have come into force from the same date.

The Ministry has received requests for clarification with regard to the relevant financial year with effect from which such provisions of the new Act relating to maintenance of books of account, preparation, adoption and filing of financial statements (and attachments thereto), auditors report and Board’s report will be applicable.

Although the position in this behalf is quite clear, to make things absolutely clear it is hereby notified that the financial statements (and documents required to be attached thereto), auditors report and Board report in respect of financial years that commenced earlier than 1st April, 2014 shall be governed by the relevant provisions/ Schedules/ rules of the Companies Act, 1956 and that in respect of financial years commencing on or after 1st April, 2014, the provisions of the new Act shall apply.

Clarification Accounting Standards (AS) 10 — Capitalization of Cost – regarding

General Circular No. 39/2014, dated 14-10-2014.

         Government has received representations from stakeholders seeking clarifications on the manner of presentation of notes in Consolidated Financial Statement (CFS) to be prepared under Schedule III to the Companies Act, 2013 (Act). These representations have been examined in consultation with the Institute of Chartered Accountants of India (ICAI) and it is clarified that Schedule III to the Act read with the applicable Accounting Standards does not envisage that a company while preparing its CFS merely repeats the disclosures made by it under stand-alone accounts being consolidated. In the CFS, the company would need to give all disclosures relevant for CFS only. [ No. 4/2/2014-CL-1 ].

Clarification on matters relating to Consolidated Financial Statement

General Circular No. 39/2014, dated 14-10-2014

Government has received representations from stakeholders seeking clarifications on the manner of presentation of notes in Consolidated Financial Statement (CFS) to be prepared under Schedule III to the Companies Act, 2013 (Act). These representations have been examined in the consultation with the Institute of Chartered Accountants of India (ICAI) and it is clarified that Schedule III to the Act read with applicable Accounting Standards does not evisage that a company while preparing its CFS merely repeats the disclosure made by it under stand-alone accounts being consolidated. In the CFS, the company would need to give all disclosure relevant for CFS only. [No. 4/2/2014-CL-1].

[ 1]  Corresponds to Schedule VI of the Companies Act, 1956.

[2] Substituted for the heading “General instructions for preparation of Balance Sheet and Statements of Profit and Loss of a Company” by Notification F. No. 17/62/2015-CL-V dated 06 th April 2016

[3] Substituted for “Trade Payables” vide Notification No. G.S.R. 679(E) dated 4-9-2015.

[4] Inserted vide Notification No. G.S.R. 679(E) dated 4-9-2015.

[5] Not applicable to government companies producing Defence Equipment including the Space Research subject to fulfillment of certain conditions. Vide File no. 1/9/2013 CL-V-Part dated 4-9-2015.

[6] Not applicable to government companies producing Defence Equipment including the Space Research subject to fulfilment of certain conditions. Vide File no. 1/9/2013 CL-V-Part dated 4-9-2015.

[7] Not applicable to government companies producing Defence Equipment including the Space Research subject to fulfilment of certain conditions. Vide File no. 1/9/2013 CL-V-Part dated 4-9-2015.

[8] Not applicable to government companies producing Defence Equipment including the Space Research subject to fulfilment of certain conditions. Vide File no. 1/9/2013 CL-V-Part dated 4-9-2015.

[9]   Inserted by Notification F. No. 17/62/2015-CL-V dated 06 th April 2016

[10] Inserted vide notification no. G.S.R. 308(E) dated 30th March 2017

[11]  Inserted vide notification no. G.S.R. 308(E) dated 30th March 2017.

[12] Substituted for the words “shall” vide Notification No. F.No. 17/62/2015-CL-V Vol-I dated 11 th October, 2018.

[13] Substituted for the words “Fixed assets” vide Notification No. F.No. 17/62/2015-CL-V Vol-I dated 11 th  October, 2018.

[14]  Omitted word “Reserve” vide Notification No. F.No. 17/62/2015-CL-V Vol-I dated 11 th October, 2018.

[15]  Substituted for the words “Fixed assets” vide Notification No. F.No. 17/62/2015-CL-V Vol-I dated 11 th  October, 2018.

5 responses to “Schedule 3 of Companies Act, 2013 : General Instructions for Preparation of Balance Sheet and Statement of Profit and Loss of a Company”

To the corporatelawreporter.com administrator, You always provide great examples and real-world applications.

Now I am ready to do my breakfast, once having my breakfast coming again to read further news.

Hi there Dear, are you really visiting this web site daily, if so after that you will without doubt obtain pleasant know-how.

It’s enormous that you are getting thoughts from this post as well as from our dialogue made at this place.

Having read this I believed it was rather enlightening. I appreciate you taking the time and effort to put this information together. I once again find myself personally spending a lot of time both reading and posting comments. But so what, it was still worthwhile!

Leave a Reply

Your email address will not be published. Required fields are marked *

• Filing of Balance Sheet and Profit and Loss Account in eXtensible Business Reporting Language (XBRL) mode for the financial year commencing on or after 01.04.2011- Corrigendum to General Circular No: 39/2012. Dec 27, 2012
• Exemption for delay in Filling of Balance Sheet and Profit and Loss Account Jul 08, 2011
• Date Extended for XBRL reporting of Balance Sheet and Profit and Loss Account Dec 13, 2012
• Extension of date for filing of Balance Sheet and Profit and Loss Account in XBRL mode Aug 02, 2011
• Filing of Balanee Sheet and Profit and Loss Account in extensible F Business Reporting Language (XBRL) mode. Dec 01, 2011
• Prudential Norms for Off-balance Sheet Exposures of Banks Aug 16, 2011
• Revised Capital Adequacy Framework for Off-Balance Sheet Items for NBFCs Dec 28, 2011
• Revised Capital Adequacy Framework for Off-Balance Sheet Items for NBFCs-Clarification Jan 02, 2012
• RBI™s Technical Committee suggests Merger of Issue and Banking Departments Balance Sheet Jun 05, 2013
• Prudential Norms for Off-balance Sheet Exposures of Banks – Restructuring of derivative contracts Aug 25, 2016

Subscribe to the Daily Journal

Corporate Law Referencer

India’s Leading Compliance Software

Get A Demo Today !

Recent Articles

• Supplement to Corporate Law Referencer 5th Edition unveiled
• Webinar on Building World Class Compliance Framework
• FAQs on SBO by eMinds Legal
• 100 FAQs on DPT-3 by eMinds Legal
• eMinds Legal releases Corporate Law Referencer, 5th Edition, 2019-20

Recent Legal updates

• MCA provides clarification on Extension of Annual General Meeting (AGM) for the Financial Year ended on 31st March, 2020
• Ministry of MSME issues criteria of investment and turnover calculation for classification under new definition of MSME
• SEBI further extends timelines for submission of Annual Secretarial Compliance Report
• SEBI further extends timelines for submission of financial results for the quarter/half year/financial year
• Extension of timelines for creation of Deposit Repayment Reserve and investment of 15% amount of maturing Debentures

Recent Gst Updates

• Disqualification of Directors for non filing of Annual Returns
• MCA relaxes additional fees and grants extension of last date of filing of Form BEN-2 and BEN-1
• Agile Form (Form-INC-35) : A Government Step Toward Ease Of Doing Business
• Form ACTIVE (Active Company Tagging Identities and Verification)-Companies (Incorporation) Amendment Rules, 2019
• Extension for last date of filing initial return in MSME Form 1

• For help and advice: Tel / Whatsapp
• +44 1624 777900
• [email protected]
• www.katzand.co

• Legislation Overview
• The Model Articles
• s1 Types of Company
• s20 & s21 Powers & Capacity
• s29 par & no par value shares
• s36 Pre-emptive rights
• s49 & s50 Distributions
• s52 s53 Share buy-back
• s57 Dividends
• s58 Capital Reduction
• s64 Correcting Share Register
• s65-69 Members Business
• s71 Written Resolutions
• s78-80 Keeping Documents
• s80 Financial Statements
• s82 Inspection of Records
• s86 Contracts and Execution of Documents
• s96 Removal of Directors
• s103-105 Director's interests
• s109 Directors' Resolutions
• s110 Alternates
• Filing Requirements
• s56 Capital Reduction
• s94a s144 Letterheads
• s102 No Trusts in Register
• s107 s109 Annual Returns
• s111 Annual General Meetings
• s113 Requisition of meeting
• s141a Removal of Director
• s116 Special Resolutions
• s118a Written Resolutions
• s119 Minutes of Meetings
• s134 s136 Inspectors
• s148 Disclosure of Interests
• s273a Dissolution
• s2 Purpose & Powers
• s7 Articles
• s11 Striking off
• s11a Solvent dissolution
• s12 Contributions
• s13 Members' Liability
• s14 Capital Withdrawal
• s15 Division of Profits
• s16 Membership transfer
• s17 Management
• s19 Accounting Records
• Foundations
• Practice Notes
• IOM Companies FAQs

80A Right to require financial statements to be prepared

  (1) If a company has not prepared financial statements for a continuous period of 18 months or more, any member or director of the company may at any time demand that financial statements be prepared for the period since the end of the financial period to which the preceding financial statements relate or, if none, since the incorporation of the company and made up to such date as is specified in the demand, not being later than the date of demand.

(2) A demand under subsection (1) shall be made in writing and deposited at the registered office of the company.

(3) The financial statements must be prepared by the company within 6 months of the date of deposit of the demand.

(4) A company that contravenes subsection (1) commits an offence.

[S 80A inserted by Companies (Amendment) Act 2009 s 29.]

80B Additional provisions concerning presentation of financial statements (1) Whenever financial statements are prepared-

(a) the statement referred to in section 80(3)(a) must give a true and fair view of the state of affairs of the company at the end of the financial period to which it relates; and

(b) the statement referred to in section 80(3)(b) must give a true and fair view of the receipts, payments and other financial transactions undertaken by the company for the financial period to which it relates.

(2) Subsection (1) is subject to subsections (3) and (4).

(3) Unless regulations made under subsection (4) require compliance with standards or the adoption of practices which are not consistent with generally accepted accounting principles or practice, in determining how amounts are presented within items within the statements referred to in section 80(3)(a) and (b) the directors of a company must have regard to the substance of the reported transaction or arrangement in accordance with generally accepted accounting principles or practice.

(4) The Financial Supervision Commission may make regulations which, in such circumstances and for such purposes as are prescribed, require compliance with standards or the adoption of practices recommended by a body specified in the regulations, and which may in particular require compliance with standards or the adoption of practices recommended by that body from time to time (that is, after as well as before the making of the regulations).

(5) Regulations under subsection (4) shall not come into operation unless they are approved by Tynwald.

(6) In this section, ‘generally accepted accounting principles or practice’ means accounting standards and practices recommended by-

(a) the International Accounting Standards Board (International Financial Reporting Standards);

(b) the Accounting Standards Board (United Kingdom Accounting Standards) (UK GAAP); or

(c) the Financial Accounting Standards Board, the Government Accounting Standards Board or the Federal Accounting Standards Advisory Board (US GAAP).

[S 80B inserted by Companies (Amendment) Act 2009 s 29.] 80C Auditor to be qualified (1) This section applies where an auditor is to be appointed by a company (whether or not under compulsion of law or other obligation).

(2) Without prejudice to the generality of subsection (1), a company must appoint an auditor where the company’s securities are listed or admitted to trade on a securities market or exchange.

(3) Where this section applies, the company must appoint an auditor who is qualified for appointment under this section to audit its financial statements.

(4) Subject to subsection (6), a person or body shall not be qualified for appointment as auditor of a company (within the meaning of this Act) unless that person or body is qualified for appointment as auditor under sections 14 to 14H of the Companies Act 1982 of a company (within the meaning of that Act).

(5) Without prejudice to the generality of subsection (4), an application may be made under section 14E of the Companies Act 1982 for authorisation under that section to be appointed as auditor of a company (within the meaning of this Act) in the same manner and subject to the same provisions as an application under that section for authorisation to be appointed as auditor of a company (within the meaning of that Act).

(6) Regulations under section 80E may modify the application of subsection (4).

[S 80C inserted by Companies (Amendment) Act 2009 s 29.]

Discover the latest MyICAEW app for ACA students and members, available to download now. Find out more

• Benefits of membership

Gain access to world-leading information resources, guidance and local networks.

• Visit Benefits of membership

Becoming a member

98% of the best global brands rely on ICAEW Chartered Accountants.

• Visit Becoming a member
• Pay fees and subscriptions

Your membership subscription enables ICAEW to provide support to members.

Fees and subscriptions

Member rewards.

Take advantage of the range of value added or discounted member benefits.

• Member rewards – More from your membership
• Technical and ethics support
• Support throughout your career

Information and resources for every stage of your career.

Member Insights Survey

Let us know about the issues affecting you, your business and your clients.

• Complete the survey

From software start-ups to high-flying airlines and high street banks, 98% of the best global brands rely on ICAEW Chartered Accountants. A career as an ICAEW Chartered Accountant means the opportunity to work in any organisation, in any sector, whatever your ambitions.

Everything you need to know about ICAEW annual membership fees, community and faculty subscriptions, eligibility for reduced rates and details of how you can pay.

Membership administration

Welcome to the ICAEW members area: your portal to members'-only content, offers, discounts, regulations and membership information.

• Membership regulations

Members are required to supply certain information to the members’ registrar and to pay annual fees and subscriptions. These matters are governed by regulations.

• Continuing Professional Development (CPD)

Continuing Professional Development (CPD) is an integral part of being a successful ICAEW Chartered Accountant.

The ICAEW Chartered Accountant qualification, the ACA, is one of the most advanced learning and professional development programmes available. It is valued around the world in business, practice and the public sector.

ACA for employers

Train the next generation of chartered accountants in your business or organisation. Discover how your organisation can attract, train and retain the best accountancy talent, how to become authorised to offer ACA training and the support and guidance on offer if you are already providing training.

Digital learning materials via BibliU

All ACA, ICAEW CFAB and Level 4 apprenticeship learning materials are now digital only. Read our guide on how to access your learning materials on the ICAEW Bookshelf using the BibliU app or through your browser.

• Find out more

Take a look at ICAEW training films

Focusing on professional scepticism, ethics and everyday business challenges, our training films are used by firms and companies around the world to support their in-house training and business development teams.

Attract and retain the next generation of accounting and finance professionals with our world-leading accountancy qualifications. Become authorised to offer ACA training and help your business stay ahead.

CPD guidance and help

Continuing Professional Development (CPD) is an integral part of being a successful ICAEW Chartered Accountant. Find support on ICAEW's CPD requirements and access resources to help your professional development.

ICAEW flagship events

ICAEW boasts an extensive portfolio of industry-leading conferences. These flagship events offer the opportunity to hear from and interact with all the key players in the industry. Find out what's coming up.

Leadership Development Programmes

ICAEW Academy’s in-depth leadership development programmes take a holistic approach to combine insightful mentoring or coaching, to exclusive events, peer learning groups and workshops. Catering for those significant transitions in your career, these leadership development programmes are instrumental to achieving your ambitions or fulfilling your succession planning goals.

Specialist Finance Qualifications & Programmes

Whatever future path you choose, ICAEW will support the development and acceleration of your career at each stage to enhance your career.

Why a career in chartered accountancy?

If you think chartered accountants spend their lives confined to their desks, then think again. They are sitting on the boards of multinational companies, testifying in court and advising governments, as well as supporting charities and businesses from every industry all over the world.

• Why chartered accountancy?

Search for qualified ACA jobs

Matching highly skilled ICAEW members with attractive organisations seeking talented accountancy and finance professionals.

Volunteering roles

Helping skilled and in-demand chartered accountants give back and strengthen not-for-profit sector with currently over 2,300 organisations posting a variety of volunteering roles with ICAEW.

• Search for volunteer roles
• Get ahead by volunteering

Advertise with ICAEW

From as little as £495, access to a pool of highly qualified and ambitious ACA qualified members with searchable CVs.

Early careers and training

Start your ACA training with ICAEW. Find out why a career in chartered accountancy could be for you and how to become a chartered accountant.

Qualified ACA careers

Find Accountancy and Finance Jobs

Voluntary roles

Find Voluntary roles

While you pursue the most interesting and rewarding opportunities at every stage of your career, we’re here to offer you support whatever stage you are or wherever you are in the world and in whichever sector you have chosen to work.

ACA students

"how to guides" for aca students.

• ACA student guide
• How to book an exam
• How to apply for credit for prior learning (CPL)

Exam resources

Here are some resources you will find useful while you study for the ACA qualification.

• Certificate Level
• Professional Level
• Advanced Level

Digital learning materials

All ACA learning materials are now digital only. Read our guide on how to access your learning materials on the ICAEW Bookshelf via the BibliU app, or through your browser.

• Read the guide

My online training file

Once you are registered as an ACA student, you'll be able to access your training file to log your progress throughout ACA training.

• Access your training file
• Student Insights

Fresh insights, innovative ideas and an inside look at the lives and careers of our ICAEW students and members.

• Read the latest articles

System status checks

Getting started.

Welcome to ICAEW! We have pulled together a selection of resources to help you get started with your ACA training, including our popular 'How To' series, which offers step-by-step guidance on everything from registering as an ACA student and applying for CPL, to using your online training file.

Credit for prior learning (CPL)

Credit for prior learning or CPL is our term for exemptions. High quality learning and assessment in other relevant qualifications is appropriately recognised by the award of CPL.

Apply for exams

What you need to know in order to apply for the ACA exams.

The ACA qualification has 15 modules over three levels. They are designed to complement the practical experience you will be gaining in the workplace. They will also enable you to gain in-depth knowledge across a broad range of topics in accountancy, finance and business. Here are some useful resources while you study.

• Exam results

You will receive your results for all Certificate Level exams, the day after you take the exam and usually five weeks after a Professional and Advanced Level exam session has taken place. Access your latest and archived exam results here.

Training agreement

Putting your theory work into practice is essential to complete your ACA training.

Student support and benefits

We are here to support you throughout your ACA journey. We have a range of resources and services on offer for you to unwrap, from exam resources, to student events and discount cards. Make sure you take advantage of the wealth of exclusive benefits available to you, all year round.

• Applying for membership

The ACA will open doors to limitless opportunities in all areas of accountancy, business and finance anywhere in the world. ICAEW Chartered Accountants work at the highest levels as finance directors, CEOs and partners of some of the world’s largest organisations.

ACA training FAQs

Do you have a question about the ACA training? Then look no further. Here, you can find answers to frequently asked questions relating to the ACA qualification and training. Find out more about each of the integrated components of the ACA, as well as more information on the syllabus, your training agreement, ICAEW’s rules and regulations and much more.

• Anti-money laundering

Guidance and resources to help members comply with their legal and professional responsibilities around AML.

Technical releases

ICAEW Technical Releases are a source of good practice guidance on technical and practice issues relevant to ICAEW Chartered Accountants and other finance professionals.

• ICAEW Technical Releases
• Thought leadership

ICAEW's Thought Leadership reports provide clarity and insight on the current and future challenges to the accountancy profession. Our charitable trusts also provide funding for academic research into accountancy.

• Academic research funding

Technical Advisory Services helpsheets

Practical, technical and ethical guidance highlighting the most important issues for members, whether in practice or in business.

• ICAEW Technical Advisory Services helpsheets

Bloomsbury – free for eligible firms

In partnership with Bloomsbury Professional, ICAEW have provided eligible firms with free access to Bloomsbury’s comprehensive online library of around 80 titles from leading tax and accounting subject matter experts.

• Bloomsbury Accounting and Tax Service

Country resources

Our resources by country provide access to intelligence on over 170 countries and territories including economic forecasts, guides to doing business and information on the tax climate in each jurisdiction.

Industries and sectors

Thought leadership, technical resources and professional guidance to support the professional development of members working in specific industries and sectors.

Audit and Assurance

The audit, assurance and internal audit area has information and guidance on technical and practical matters in relation to these three areas of practice. There are links to events, publications, technical help and audit representations.

The most up-to-date thought leadership, insights, technical resources and professional guidance to support ICAEW members working in and with industry with their professional development.

• Corporate Finance

Companies, advisers and investors making decisions about creating, developing and acquiring businesses – and the wide range of advisory careers that require this specialist professional expertise.

• Corporate governance

Corporate governance is the system by which companies are directed and controlled. Find out more about corporate governance principles, codes and reports, Board subcommittees, roles and responsibilities and shareholder relations. Corporate governance involves balancing the interests of a company’s many stakeholders, such as shareholders, employees, management, customers, suppliers, financiers and the community. Getting governance right is essential to build public trust in companies.

• Corporate reporting

View a range of practical resources on UK GAAP, IFRS, UK regulation for company accounts and non-financial reporting. Plus find out more about the ICAEW Corporate Reporting Faculty.

Expert analysis on the latest national and international economic issues and trends, and interviews with prominent voices across the finance industry, alongside data on the state of the economy.

• Financial Services

View articles and resources on the financial services sector.

• Practice resources

For ICAEW's members in practice, this area brings together the most up-to-date thought leadership, technical resources and professional guidance to help you in your professional life.

Public Sector

Many ICAEW members work in or with the public sector to deliver public priorities and strong public finances. ICAEW acts in the public interest to support strong financial leadership and better financial management across the public sector – featuring transparency, accountability, governance and ethics – to ensure that public money is spent wisely and that public finances are sustainable.

Sustainability and climate change

Sustainability describes a world that does not live by eating into its capital, whether natural, economic or social. Members in practice, in business and private individuals all have a role to play if sustainability goals are to be met. The work being undertaken by ICAEW in this area is to change behaviour to drive sustainable outcomes.

The Tax area has information and guidance on technical and practical tax matters. There are links to events, the latest tax news and the Tax Faculty’s publications, including helpsheets, webinars and Tax representations.

Keep up-to-date with tech issues and developments, including artificial intelligence (AI), blockchain, big data, and cyber security.

Trust & Ethics

Guidance and resources on key issues, including economic crime, business law, better regulation and ethics. Read through ICAEW’s Code of Ethics and supporting information.

Communities

ICAEW Communities

Information, guidance and networking opportunities on industry sectors, professional specialisms and at various stages throughout your career. Free for ICAEW members and students.

• Discover a new community

ICAEW Faculties

The accountancy profession is facing change and uncertainty. The ICAEW Faculties can help by providing you with timely and relevant support.

• Choose to join any of the faculties

UK groups and societies

We have teams on the ground in: East of England, the Midlands, London and South East, Northern, South West, Yorkshire and Humberside, Wales and Scotland.

• Access your UK region
• Worldwide support and services

Support and services we offer our members in Africa, America, Canada, the Caribbean, Europe, Greater China, the Middle East, Oceania and South East Asia.

• Discover our services

ICAEW Faculties are 'centres of technical excellence', strongly committed to enhancing your professional development and helping you to meet your CPD requirements every year. They offer exclusive content, events and webinars, customised for your sector - which you should be able to easily record, when the time comes for the completion of your CPD declaration. Our offering isn't exclusive to Institute members. As a faculty member, the same resources are available to you to ensure you stay ahead of the competition.

Communities by industry / sector

Communities by life stage and workplace, communities by professional specialism, local groups and societies.

We aim to support you wherever in the world you work. Our regional offices and network of volunteers run events and provide access to local accounting updates in major finance centres around the globe.

Election explainers

ICAEW experts offer simple guides to help understand the technical, economic jargon that will be at the heart of political debates in the coming weeks.

Insights pulls together the best opinion, analysis, interviews, videos and podcasts on the key issues affecting accountancy and business.

• See the latest insights

ICAEW podcasts

ICAEW produces two podcast series that count towards your CPD: Accountancy Insights for news from across the profession, and The Tax Track for specialist analysis from the ICAEW Tax Faculty.

Professional development and skills

With new requirements on ICAEW members for continuing professional development, we bring together resources to support you through the changes and look at the skills accountants need for the future.

• Visit the hub
• Diversity and Inclusion

Diversity and inclusion is a key pillar of ICAEW's strategy. Discover the latest insights on equality, diversity and inclusion. You can also join our Diversity & Inclusion Community.

• Find out more on our hub
• Join the community

Insights specials

A listing of one-off Insights specials that focus on a particular subject, interviewing the key people, identifying developing trends and examining the underlying issues.

Top podcasts

Insights by topic.

ICAEW Regulation

• Regulatory News

View the latest regulatory updates and guidance and subscribe to our monthly newsletter, Regulatory & Conduct News.

• Regulatory Consultations

Strengthening trust in the profession

Our role as a world-leading improvement regulator is to strengthen trust and protect the public. We do this by enabling, evaluating and enforcing the highest standards in the profession. 

Regulatory applications

Find out how you can become authorised by ICAEW as a regulated firm. 

ICAEW codes and regulations

Professional conduct and complaints, statutory regulated services overseen by icaew, regulations for icaew practice members and firms, additional guidance and support, popular search results.

• Practice Exam Software
• Training File
• Ethics Cpd Course
• Routes to the ACA
• ACA students membership application
• Join as a member of another body
• How much are membership fees?
• How to pay your fees
• Receipts and invoices
• What if my circumstances have changed?
• Difficulties in making changes to your membership
• Faculty and community subscription fees
• Updating your details
• Complete annual return
• Promoting myself as an ICAEW member
• Verification of ICAEW membership
• Become a life member
• Become a fellow
• Request a new certificate
• Report the death of a member
• Practising certificates
• Advancement to fellowship regulations
• Regulations relating to membership cessation, readmission and resignation
• ICAEW's guide to directors' duties and responsibilities
• Information to be supplied by members
• Payment of annual subscription
• Power to change subscription fees
• New members
• Career progression
• Career Breakers
• Volunteering at schools and universities
• ICAEW Member App
• Working internationally
• Self employment
• Support Members Scheme
• Your guide to CPD
• CPD learning resources
• Online CPD record
• How to become a chartered accountant
• Register as a student
• Train as a member of another body
• More about the ACA and chartered accountancy
• How ACA training works
• Become a training employer
• Access the training file
• Why choose the ACA
• Training routes
• Employer support hub
• Get in touch
• Apprenticeships with ICAEW
• A-Z of CPD courses by topic
• Firms' guide to CPD
• ICAEW Business and Finance Professional (BFP)
• ICAEW Annual Conference 2024
• Restructuring & Insolvency Conference
• Virtual CPD Conference
• Virtual Healthcare Conference 2024
• All our flagship events
• Financial Talent Executive Network (F-TEN®)
• Developing Leadership in Practice (DLiP™)
• Network of Finance Leaders (NFL)
• Women in Leadership (WiL)
• Mentoring and coaching
• Partners in Learning
• Board Director's Programme e-learning
• Corporate Finance Qualification
• Diploma in Charity Accounting
• ICAEW Certificate in Insolvency
• ICAEW Data Analytics Certificate
• Financial Modeling Institute’s Advanced Financial Modeler Accreditation
• ICAEW Sustainability Certificate for Finance Professionals
• ICAEW Finance in a Digital World Programme
• All specialist qualifications
• Team training
• Start your training
• Improve your employability
• Search employers
• Find a role
• Role alerts
• Organisations
• Practice support – 11 ways ICAEW and CABA can help you
• News and advice
• ICAEW Volunteering Hub
• Support in becoming a chartered accountant
• Vacancies at ICAEW
• ICAEW boards and committees
• Exam system status
• ICAEW systems: status update
• Changes to our qualifications
• How-to guides for ACA students
• Apply for credits - Academic qualification
• Apply for credits - Professional qualification
• Credit for prior learning (CPL)/exemptions FAQs
• Applications for Professional and Advanced Level exams
• Applications for Certificate Level exams
• Tuition providers
• Latest exam results
• Archived exam results
• Getting your results
• Marks feedback service
• Exam admin check
• Training agreement: overview
• Professional development
• Ethics and professional scepticism
• Practical work experience
• Access your online training file
• How training works in your country
• Student rewards
• TOTUM PRO Card
• Student events and volunteering
• Xero cloud accounting certifications
• Student support
• Join a community
• Wellbeing support from caba
• Student mentoring programme
• Student conduct and behaviour
• Code of ethics
• Fit and proper
• Level 4 Accounting Technician Apprenticeship
• Level 7 Accountancy Professional Apprenticeship
• AAT-ACA Fast Track FAQs
• ACA rules and regulations FAQs
• ACA syllabus FAQs
• ACA training agreement FAQs
• Audit experience and the Audit Qualification FAQs
• Independent student FAQs
• Practical work experience FAQs
• Professional development FAQs
• Six-monthly reviews FAQs
• Ethics and professional scepticism FAQs
• Greater China
• Latin America
• Middle East
• North America
• Australasia
• Russia and Eurasia
• Southeast Asia
• Charity Community
• Construction & Real Estate
• Energy & Natural Resources Community
• Farming & Rural Business Community
• Forensic & Expert Witness
• Global Trade Community
• Healthcare Community
• Internal Audit Community
• Manufacturing Community
• Media & Leisure
• Portfolio Careers Community
• Small and Micro Business Community
• Small Practitioners Community
• Travel, Tourism & Hospitality Community
• Valuation Community
• Audit and corporate governance reform
• Audit & Assurance Faculty
• Professional judgement
• Regulation and working in audit
• Internal audit resource centre
• ICAEW acting on audit quality
• Everything business
• Latest Business news from Insights
• Strategy, risk and innovation
• Business performance management
• Financial management
• Finance transformation
• Economy and business environment
• Leadership, personal development and HR
• Webinars and publications
• Business restructuring
• The Business Finance Guide
• Capital markets and investment
• Corporate finance careers
• Corporate Finance Faculty
• Debt advisory and growth finance
• Mergers and acquisitions
• Private equity
• Start-ups, scale-ups and venture capital
• Transaction services
• Board committees and board effectiveness
• Corporate governance codes and reports
• Corporate Governance Community
• Principles of corporate governance
• Roles, duties and responsibilities of Board members
• Stewardship and stakeholder relations
• Corporate Governance thought leadership

Corporate reporting resources

• Small and micro entity reporting
• IFRS Accounting Standards
• UK Regulation for Company Accounts
• Non-financial reporting
• Improving Corporate Reporting
• Economy home
• ICAEW Business Confidence Monitor
• ICAEW Manifesto 2024
• Economy explainers
• Spring Budget 2024
• Energy crisis
• Levelling up: rebalancing the UK’s economy
• Resilience and Renewal: Building an economy fit for the future
• Social mobility and inclusion
• Investment management
• Inspiring confidence
• Setting up in practice
• Running your practice
• Supporting your clients
• Practice technology
• TAS helpsheets
• Support for business advisers
• Join ICAEW BAS
• Public Sector hub
• Public Sector Audit and Assurance
• Public Sector Finances
• Public Sector Financial Management
• Public Sector Financial Reporting
• Public Sector Learning & Development
• Public Sector Community
• Latest public sector articles from Insights
• Making COP count
• Climate hub
• Sustainable Development Goals
• Accountability
• Modern slavery
• Resources collection
• Sustainability Committee
• Sustainability & Climate Change community
• Sustainability and climate change home
• Tax Faculty
• Budgets and legislation
• Business tax
• Devolved taxes
• Employment taxes
• International taxes
• Making Tax Digital
• Personal tax
• Property tax
• Stamp duty land tax
• Tax administration
• Tax compliance and investigation
• UK tax rates, allowances and reliefs
• Artificial intelligence
• Blockchain and cryptoassets
• Cyber security
• Data Analytics Community
• Digital skills
• Excel community
• Finance in a Digital World
• IT management
• Technology and the profession
• Trust & Ethics home
• Better regulation
• Business Law
• UK company law
• Data protection and privacy
• Economic crime
• Help with ethical problems
• ICAEW Code of Ethics
• ICAEW Trust and Ethics team.....
• Solicitors Community
• Forensic & Expert Witness Community
• Latest articles on business law, trust and ethics
• Audit and Assurance Faculty
• Corporate Reporting Faculty
• Financial Services Faculty
• Academia & Education Community
• Construction & Real Estate Community
• Entertainment, Sport & Media Community
• Retail Community
• Black Members Community
• Career Breakers Community
• Diversity & Inclusion Community
• Women in Finance Community
• Personal Financial Planning Community
• Restructuring & Insolvency Community
• Sustainability and Climate Change Community
• London and East
• Yorkshire and Humberside
• European public policy activities
• ICAEW Middle East
• Latest news
• The World’s Fastest Accountant
• Access to finance special
• Attractiveness of the profession
• Audit and Fraud
• Audit and technology
• Adopting non-financial reporting standards
• Cost of doing business
• Mental health and wellbeing
• Pensions and Personal Finance
• Ukraine crisis: central resource hub
• More specials ...
• The economics of biodiversity
• How chartered accountants can help to safeguard trust in society
• Video: The financial controller who stole £20,000 from her company
• It’s time for chartered accountants to save the world
• Video: The CFO who tried to trick the market
• Video: Could invoice fraud affect your business?
• Business confidence, local authority finance, probate delays, and tax reform
• Why are female-led startups so underfunded?
• How to get Britain growing
• Groupthink: the boardroom’s most pervasive problem?
• Corporate reporting update and VAT on private hire vehicles
• AI in audit: the good, the bad and the ugly
• Company size thresholds and CGT on residences
• Lessons in leadership from ICAEW's CEO
• So you want to be a leader?
• A busy new tax year, plus progress on the Economic Crime Act
• Does Britain have a farming problem?
• More podcasts...
• Top charts of the week
• EU and international trade
• CEO and President's insights
• Sponsored content
• Insights index
• Charter and Bye-laws
• Archive of complaints, disciplinary and fitness processes, statutory regulations and ICAEW regulations
• Qualifications regulations
• Training and education regulations
• How to make a complaint
• Guidance on your duty to report misconduct
• Public hearings
• What to do if you receive a complaint against you
• Anti-money laundering supervision
• Working in the regulated area of audit
• Local public audit in England
• Probate services
• Designated Professional Body (Investment Business) licence
• Consumer credit
• Quality Assurance monitoring: view from the firms
• The ICAEW Practice Assurance scheme
• Licensed Practice scheme
• Professional Indemnity Insurance (PII)
• Clients' Money Regulations
• Taxation (PCRT) Regulations
• ICAEW training films
• Helpsheets and guidance by topic
• ICAEW's regulatory expertise and history
• IFRS accounting standards

IAS 1 Presentation of Financial Statements

Presentation of financial statements sets out the overall requirements for the presentation of financial statements, guidelines for their structure, and minimum requirements for their content., access the standard, current proposals, recent amendments, related ifric interpretations, uk reduced disclosures – frs 101, icaew factsheets and guides, icaew articles, other resources.

• 2023 Issued Standard – IAS 1 The 2023 Issued Standards include all amendments issued up to and including 1 January 2023.

Registration is required to access the free version of the Issued Standards, which do not include additional documents that accompany the full standard (such as illustrative examples, implementation guidance and basis for conclusions).

A complete set of financial statements includes:

• A statement of financial position (balance sheet) at the end of the period
• A statement of profit or loss and other comprehensive income (income statement) for the period
• A statement of changes in equity for the period
• A statement of cash flows (cash flow statement) for the period
• Notes to the accounts.

The names of the main statements are not mandatory.

IAS 1 Revised also requires a statement of financial position at the start of the earliest comparative period where there has been a retrospective adjustment to the accounts or reclassification of items.

The statement of profit or loss and other comprehensive income, as the name suggests, presents profit and loss for the period as well as other comprehensive income. Other comprehensive income includes income and expenses not recognised in profit or loss such as revaluation surpluses. The statement of profit or loss and other comprehensive income may be presented either as one statement or a separate statement of profit or loss and statement showing other comprehensive income.

The standard provides guidance on the form and content of the financial statements and the underlying accounting concepts. It also requires financial statements to present fairly the position, performance and cash flows of an entity. This is normally achieved by the application of IFRS.

ED/2019/7 General Presentation and Disclosures was issued in December 2019. This is the exposure draft of a proposed new standard that would replace IAS 1. The standard would carry forward most of the current requirements of IAS 1 and add supplementary requirements, including:

• Categorising items in profit or loss as operating, investing or financing
• Requiring additional profit subtotals
• Distinguishing between integral and non-integral associates and joint ventures
• Removing the choice of how to present cash flows from dividends and interest
• Requiring additional disclosure about unusual items
• Providing disclosure of management performance measures.

All amendments issued up to and including the publication date of 1 January 2022 are included within the IFRS Foundation’s latest version of the issued standard: 2022 Issued Standard – IAS 1 . Issued amendments may, therefore, have a mandatory effective date that is later than 1 January 2022 – see below for details.

Any amendments issued after 1 January 2022 will not be included in the IFRS Foundation’s 2022 Issued Standards but will be listed below and identified as such.

See the Corporate Reporting Faculty’s annual IFRS factsheets  for a more detailed discussion of recent IFRS amendments.

Mandatory date: Annual periods beginning on or after 1 January 2024. Earlier application is permitted.

Issue date: October 2022 (not included within the IFRS Foundation’s 2022 Issued Standards).

The amendments specify that the classification of a liability as current or non-current is only affected by covenants that an entity must comply with on or before the end of the reporting period. They also require disclosure of information that allows users of financial statements to understand the risk that non-current liabilities with covenants could become repayable within 12 months.

This amendment has been endorsed for use in the UK. It is not yet endorsed for use in the EU as at 25 July 2023. Read more on UK endorsement  and EU endorsement  of IFRS standards.

For a more detailed discussion of the amendment, read the faculty’s factsheet:

• 2022 IFRS Accounts

Mandatory date: Annual periods beginning on or after 1 January 2024 (deferred from 2023). Earlier application is permitted.

IAS 1 is amended to clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. Expectations about whether an entity will exercise a right to defer settlement of a liability do not affect its classification. The amendments also clarify that settlement is the transfer of cash, equity instruments, other assets or services.

The deferral of the effective date to 2024 is included in the Non-current Liabilities with Covenants amendment to IAS 1.

Mandatory date: Annual periods beginning on or after 1 January 2023. Earlier application is permitted.

The amendments to IAS 1:

• Require an entity to disclose material accounting policy information rather than significant accounting policies.
• Explain that accounting policy information is material if, together with other information in the financial statements, it can reasonably be expected to influence decisions that primary users make.
• Provide examples of material accounting policies.
• Clarify that accounting policy information relating to immaterial transactions need not be disclosed.

IAS 1 is amended to:

• Add finance income and expenses to the list of components of other comprehensive income;
• Require line items to be presented in the statement of financial position in respect of contracts that are within the scope of IFRS 17;
• Require line items to be presented in the statement of profit or loss in respect of amounts related to contracts within the scope of IFRS 17.

IAS 1 is amended to refer to portfolios of contracts rather than groups of contracts within the scope of IFRS 17.

Mandatory date: Annual periods beginning on or after 1 January 2020. Earlier application is permitted.

The definition of material is amended to be as follows:

Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.

Examples of circumstances that may result in material information being obscured are added to the standard as a result of the amendment, as is guidance on users of financial statements.

• 2020 IFRS Accounts

Mandatory date: Annual periods beginning on or after 1 January 2020. Earlier application is permitted if an entity also applies the amendments to other IFRS Accounting Standards at the same time.

IAS 1 is updated to refer to the 2018 Conceptual Framework rather than the Framework for the Preparation and Presentation of Financial Statements when referring to materiality, definitions of elements and their recognition criteria and the objective of financial statements.

• IFRIC 1 Existing Decommissioning, Restoration and Similar Liabilities Addresses accounting for a change in a provision that is included in the carrying amount of an item of PPE.
• IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction Provides general guidance on how to assess the limit in IAS 19 on the amount of the surplus that can be recognised as an asset. Explains how the pensions asset or liability may be affected when there is a statutory or contractual minimum funding requirement.
• IFRIC 17 Distribution of Non-cash Assets to Owners Addresses the accounting for dividends of non-cash assets, including those where there is a cash alternative.
• IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments Addresses the accounting by an entity which issues equity instruments in order to settle, in full or part, a financial liability.
• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine Addresses the accounting treatment of mine waste materials, which are the materials removed by mining entities in order to gain access to mineral ore deposits.
• IFRIC 21 Levies Provides guidance on when to recognise liability for a levy imposed by a government.
• IFRIC 23 Uncertainty over Income Tax Treatments Clarifies how to apply the recognition and measurement requirements of IAS 12 when there is uncertainty over income tax treatments.
• SIC 7 Introduction of the Euro The effective start of the EMU after the reporting date does not alter the requirements of IAS 21 at the reporting date.
• SIC 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders Addresses the deferred tax consequences of changes in tax status of an enterprise or its shareholders.
• SIC 29 Disclosure – Service Concession Arrangements Prescribes disclosures required by a concession operator and concession provider joined by a service concession arrangement.
• SIC 32 Intangible Assets – Website Costs Addresses accounting for costs associated with the development of a website.

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Our FRS 101 page  gives more information on which entities qualify and the criteria to be met.

The following amendments must be made to IAS 1 in order to achieve compliance with the Companies Act and related Regulations:

• The statement of financial position must comply with the balance sheet format requirements of the Companies Act.
• The statement of profit or loss and other comprehensive income must comply with the profit and loss account format requirements of the Companies Act.
• Ordinary activities of an entity are defined and extraordinary items are described as highly abnormal material items arising from events falling outside an entity’s ordinary activities.
• It is clarified that items of income or expense are not recognised in profit or loss where such recognition is prohibited by the Companies Act.

FRS 101 paragraph 8(f) states that a qualifying entity is exempt from the IAS 1 requirement to present the following within a set of financial statements:

• A statement of cash flows for the period;
• A third statement of financial position when a retrospective adjustment or reclassification is made;
• A statement of compliance with IFRS;
• A reconciliation of property, plant and equipment, intangible assets, investment properties, biological assets and the number of shares outstanding at the beginning and end of the comparative period;
• Capital management disclosures (this exemption is not available to a financial institution);
• All remaining IAS 1 disclosures must be applied.

IAS 1 paragraphs for which exemption is available: 10(d), 10(f), 16, 38A-D, 40A-D, 111, 134-6.

The Corporate Reporting Faculty's annual IFRS factsheets  provide a more detailed discussion of recent IFRS amendments.

• Helpsheets and support
• 16 Feb 2024
• 08 Aug 2023
• PDF (398kb)
• PDF (415kb)
• 22 Aug 2024
• PDF (470kb)
• 10 Apr 2024
• 14 Nov 2022
• 30 Dec 2020
• 11 Jun 2020

The ICAEW Library & Information Service provides full text access to a selection of key business and reference eBooks from leading publishers. eBooks are available to logged-in ICAEW members, ACA students and other entitled users. If you are unable to access an eBook, please see our Help and support advice or contact [email protected] .

• eBook chapter
• PKF International Ltd
• Wiley Interpretation and Application of IFRS Standards
• Ernst & Young LLP
• International GAAP - Generally Accepted Accounting Practice under International Financial Reporting Standards

Terms of use

You are permitted to access, download, copy, or print out content from eBooks for your own research or study only, subject to the terms of use set by our suppliers and any restrictions imposed by individual publishers. Please see individual supplier pages for full terms of use.

Overviews of each international accounting standard, with a history and timeline of key events and amendments.

Detailed guide on interpreting and implementing IFRS, with illustrative examples and extracts from financial statements. The manual is available online (free registration required) as part of EY Atlas Client Edition.

Further support

Practical resources including factsheets, online guides and webinars on financial and non-financial reporting.

Technical Advisory Services

Our experienced advisors can help you with technical questions.

Library and Information Service

Expert help with research and access to trustworthy, professional sources.

• +44 (0)20 7920 8620
• [email protected]

Some of the content on this web page was provided by the Chartered Accountants’ Trust for Education and Research, a registered charity, which owns the library and operates it for ICAEW.

Read out this code to the operator.

• Sign in to your personal account
• Not registered? Sign up for a personal account
• Have an access token?
• How to use this site

Chapter 2: Companies Act 2006 Issues

UK Financial Statements: Presentation and Disclosure Requirements

If you would like to access this content, but you are not currently a subscriber, please sign up for a free trial here . If you already subscribe to this service please login here .

Subscriber Login

ICAEW users please register or login here »

• Login with Shibboleth »
• Privacy and Cookie Policy
• Terms & Conditions
• Accessibility Statement
• Bloomsbury Professional
• Bloomsbury.com

© Bloomsbury Publishing Plc 2023

• [185.194.105.172]
• 185.194.105.172

• Submit Post
• Budget 2024
• Company Law

Financial Statements-Schedule-III – Companies Act, 2013

What are provisions relating to financial statements under the New companies act 2013

1. Section 129 of companies act 2013, provides for preparation of financial statements.

2. 2(40) to include balance sheet, profit and loss account/income and expenditure account, cash flow statement, statement of changes in equity and any explanatory note annexed to the above.

3. New section 129 corresponds to existing section 210. It provides that the financial statements shall give a true and fair view of the state of affairs of the company and shall comply with the accounting standards notified under new section 133.

4. It is also provided that the financial statements shall be prepared in the form provided in new schedule III of Companies Act, 2013 .

5. It may be noted that in the new schedule III the provisions for preparation of balance sheet and statement of profit and loss have been given which are on the same lines as in the existing schedule VI.

6. Further, in the new Schedule III detailed instructions have been given for preparation of consolidated financial statements as consolidation of accounts of subsidiary companies is now made mandatory in section 129.

7. It may be noted that for the first time a provision has been made in the new section 129(3)that if a company has one or more subsidiaries it will have to prepare a consolidated financial statement of the company and of all the subsidiaries in the form provided in the new schedule III of Companies Act, 2013 .

8. The company has also to attack along with its financial statement, a separate statement containing the salient features of the financials of the subsidiary companies in such form as may prescribed by the rules.

9. It is also provided that if the company has interest in any associate company or a joint venture the accounts of that company as well as joint venture shall be consolidated.

10. For this purpose associate company has been definedinnewsection2(6) company has significant influence i.e. it has. 20% of the total share capital of the company or has control on the business decision under an agreement.

11 .The Central Government has power to exempt any companies from complying with any of the requirements made under the section.

(1)    Where compliance with the requirements of the Act including as applicable to the companies require any change in treatment or disclosure including addition, amendment, substitution or deletion in the head or sub-head or any changes, in the financial statements or statements forming part thereof, the same shall be made and the requirements of this Schedule shall stand modified accordingly.(2)    The disclosure requirements specified in this Schedule are in addition to and not in substitution of the disclosure requirements specified in the Accounting Standards prescribed under the Companies Act, 2013. Additional disclosures specified in the Accounting Standards shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of the Financial Statements. Similarly, all other disclosures as required by the Companies Act shall be made in the notes to accounts in addition to the requirements set out in this Schedule. (3)    (i) Notes to accounts shall contain information in addition to that presented in the Financial Statements and shall provide where required a)      narrative descriptions or disaggregation’s of items recognised in those statements; and b)      Information about items that do not qualify for recognition in those statements. (ii) Each item on the face of the Balance Sheet and Statement of Profit and Loss shall be cross-referenced 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 not providing important information as a result of too much aggregation (4)    (i) Depending upon the turnover of the company, the figures appearing in the Financial Statements maybe rounded off as given below:— Turnover Rounding off (a) less than one hundred’ crore rupees To the nearest hundreds, thousands, lakhsormillions, or decimals thereof (b) one hundred crore rupees or more To the nearest lakhs, millions or crores, or decimals thereof.   PART I-BALANCE SHEET Name of the Company……………………. Balance Sheet as at……………………… Particulars Note No. Figures as at the end of current reporting period Figures as at the end of previous reporting period (a) Share Capital (b) Reserves and Surplus (c) Money received against share warrants (a) Long-term borrowings (b) Deferred tax liabilities (Net) (c) Other Long term liabilities (d) Long term provisions (a) Short-term borrowings (b) Trade payables (c) Other current liabilities (d) Short-term provisions (1) Non-current assets(a) Fixed assets (i) Tangible assets (ii) Intangible assets (iii) Capital work-in-progress (iv) Intangible assets under development (b) Non-current investments (c) Deferred tax assets (net) (d) Long term loans and advances (e) Other non-current assets (a) Current investments (b) Inventories (c) Trade receivables (d) Cash and cash equivalents (e) Short-term loans and advances (f) Other current assets Total   GENERAL INSTRUCTIONS FOR PREPARATION OF BALANCE SHEET PARTICULARS 1. If it satisfies any of the given criteria (a) it is expected to be realised, or is intended for sale or consumption, in the company’s normal operating cycle; or(b) it is held primarily for the purpose of being traded; or (c) it is expected to be realised within twelve months after the reporting date; or (d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date. 2. Asset other than Current Asset shall be classified as non current Time betweenThe acquisition of assets for processing And Their realisation in cash or cash equivalents Where the normal operating cycle cannot be identified: It is assumed to have a duration of 12 months If it satisfies any of thegiven criteria (a) It is expected to be settled in the company normal operating cycle; or(b) It is held primarily for the purpose of being traded; or (c) It is due to be settled within twelve months after the reporting date; or (d)The company does not have an unconditional right to defer 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 instruments do not affect its classification. liability other than Current liability shall be classified as Non-Current. If it is in respect of the amount due on account of goods sold or services rendered In The Normal Course Of Business If it is in respect of the amount due on account of goods purchased or services received In The Normal Course Of Business 1 a.       The number and amount of shares authorized.b.      The number of shares issued, subscribed and fully paid, and subscribed but not fully paid. c.       Par value per share. d.      A reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period. e.      The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital. f.        Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by or by subsidiaries or associates of the holding company or the ultimate holding company in aggregate. g.       Shares in the company held by each shareholder holding more than 5 per cent, shares specifying the number of shares held. h.      Shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment, including the terms and amounts. i.         For the period of five years immediately preceding the date as at which the Balance Sheet is prepared. i.      Aggregate number and class of shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash. ii.      Aggregate number and class of shares allotted as fully paid-up by way of bonus shares. iii.      Aggregate number and class of shares bought back. j.        Terms of any securities convertible into equity/preference shares issued along with the earliest date of conversion in descending order starting from the farthest such date. k.       Calls unpaid (showing aggregate value of calls unpaid by directors and officers). l.         Forfeited shares (amount originally paid-up). 2 1) Capital Reserves;2) Capital Redemption Reserve; 3) Securities Premium Reserve; 4) Debenture Redemption Reserve; 5) Revaluation Reserve; 6) Share Options Outstanding Account; 7) Other Reserves(specify the nature and purpose of each reserve and the amount in respect thereof); 8) Surplus i.e., balance in Statement of Profit and Loss disclosing allocations and appropriations such as dividend, bonus snares and transfer to/from reserves, etc.; (Additions and deductions since last balance sheet to be shown under each of the specified heads); by earmarked investments shall be termed as a “fund”. Shall be shown as a negative figure under the head “Surplus”. Similarly, the balance of “Reserves and Surplus”, after adjusting negative balance of surplus, if any, shall be shown under the head “Reserves and Surplus” even if the resulting figure is in the negative. 3. 1) Bonds/debentures;2) Term loans: (i) from banks. (ii) from other parties 3) Deferred payment liabilities; 4) Deposits; 5) Loans and advances from related parties; 6) Long term maturities of finance lease obligations; 7) Other loans and advances (specify nature) (Nature of security shall be specified separately in each case) The aggregate amount of such loans under each head shall be disclosed. shall be stated in descending order of maturity or conversion, starting from farthest redemption or conversion date, as the case may be. Where bonds/debentures are redeemable by instalments, the date of maturity for this purpose must be reckoned as the date on which the first instalment becomes due. which the company has power to reissue shall be disclosed Terms of repayment of term loans and other loans Period and amount of continuing default as on the balance sheet date in repayment of loans and interest(separately in each case) 4. (1)    Trade payables;(2)    Others. 5. 1) Provision for employee benefits;2) Others (specify nature). 6. 1) Loans repayable on demand;(i) from banks. (ii) from other parties. (iii) Loans and advances from related parties; (iv) Deposits; (v) Other loans and advances (specify nature). secured and unsecured(Nature of security shall be specified separately in each case) The aggregate amount of such loans under each head shall be disclosed. Period and amount of continuing default as on the balance sheet date in repayment of loans and interest (separately in each case) 7. 1) Current maturities of long-term debt;2) Current maturities of finance lease obligations; 3) Interest accrued but not due on borrowings; 4) Interest accrued and due on borrowings; 5) Income received in advance; 6) Unpaid Jividends; 7) Application money received for allotment of securities and due for refund and 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 before which shares shall be allotted shall be disclosed. It shall also be disclosed 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 beyond the period for allotment as mentioned in the document inviting application for shares along with the reason for such share application money being pending shall be disclosed. Share application money not exceeding the issued capital and 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, shall be separately shown under “Other current liabilities”; 8) Unpaid matured deposits and interest accrued thereon; 9) Unpaid matured debentures and interest accrued thereon; 10) Other payables (specify nature). 8 1) Provision for employee benefits2) Others (specify nature). 9. 1) Land;2) Buildings; 3) Plant and Equipment; 4) Furniture and Fixtures; 5) Vehicles; 6) Office equipment; 7) Others (specify nature). under each class of asset showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. shall show the reduced or increased figures as applicable and shall by way of a note also show the amount of the reduction or increase as applicable together with the date thereof for the first five years subsequent to the date of such reduction or increase. 10 1) Goodwill;2) Brands /trademarks; 3) Computer software; 4) Mastheads and publishing titles; 5) Mining rights; 6) Copyrights, and patents and other intellectual property rights, services and operating rights; 7) Recipes, formulae, models, designs and prototypes; 8) Licences and franchise; 9) Others (specify nature). showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. shall show the reduced or increased figures as applicable and shall by way of a note also show the amount of the reduction or increase as applicable together with the date thereof for the first five years subsequent to the date of such reduction or increase. 11. 1) Investment property;2) Investments in Equity Instruments; 3) Investments in preference shares; 4) Investments in Government or trust securities; 5) Investments in debentures or bonds; 6) Investments in Mutual Funds; 7) Investments in partnership firms; 8) Other non-current investments (specify nature). Under each classification, details shall be given of names of the bodies corporate indicating separately whether such bodies are (i) subsidiaries, (ii) associates, (iii) joint ventures, or (iv) controlled special purpose entities in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly-paid). In regard to investments in the capital of partnership firms, the names of the firms (with the names of all their partners, total capital and the shares of each partner) shall be given. should be separately stated specifying the basis for valuation thereof; 1) Aggregate amount of quoted investments and market value thereof;2) Aggregate amount of unquoted investments; 3) Aggregate provision for diminution in value of investments. 12. 1) Capital Advances;2) Security Deposits; 3) Loans and advances to related parties (giving details thereof); 4) Other loans and advances (specify nature). 1) Secured, considered good;2) Unsecured, considered good; 3) Doubtful. shall be disclosed under the relevant heads separately. should be separately stated. 13. 1) Long-term Trade Receivables (including trade receivables on deferred credit terms);2) Others (specify nature); 3) Long term Trade Receivables, shall be sub-classified as: (i) Secured, considered good;(ii) Unsecured, considered good; (iii) Doubtful Allowance for bad and doubtful debts shall be disclosed under the relevant heads 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 member should be separately stated. 14. 1) Investments in Equity Instruments;2) Investment in Preference Shares; 3) Investments in Government or trust securities: 4) Investments in debentures or bonds; 5) Investments in Mutual Funds; 6) Investments in partnership firms; 7) Other investments (specify nature). details shall be given of names of the bodies corporate indicating separately whether such bodies are:(i) subsidiaries, (ii) associates, (iii) joint ventures, or (iv) controlled special purpose entities in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly paid). In regard to investments in the capital of partnership firms, the names of the firms (with the names of all their partners, total capital and the shares of each partner) shall be given. 1) The basis of valuation of individual investments2) Aggregate amount of quoted investments and market value thereof; 3) Aggregate amount of unquoted investments; 4) Aggregate provision made for diminution in value of investments 15. 1) Raw materials;2) Work-in-progress; 3) Finished goods; 4) Stock-in-trade (in respect of goods acquired for trading); 5) Stores and spares; 6) Loose tools; 7) Others (specify nature) shall be disclosed under the relevant sub-head of inventories shall be stated 16. Aggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment 1) Secured, considered good;2) Unsecured, considered good; 3) Doubtful. Allowance for bad and doubtful debts shall be disclosed under the relevant heads 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 member should be separately stated. 17. 1) Balances with banks;2) Cheques, drafts on hand; 3) Cash on hand; 4) Others (specify nature) shall be separately stated shall be disclosed separately. shall be disclosed separately. shall be disclosed separately. 18. 1) Loans and advances to related parties (giving details thereof);2) Others (specify nature). 1) Secured, considered good;2) Unsecured, considered good; 3) Doubtful. shall be disclosed under the relevant heads separately shall be separately stated 19. which incorporates current assets that do not fit into any other asset categories 20. 1) Claims against the company not acknowledged as debt; 2) Guarantees;3) Other money for which the company is contingently liable. 1) Estimated amount of contracts remaining to be executed on capital account and not provided for; 2) Uncalled liability on shares and other investments partly paid; 3) Other commitments (specify nature).   PART-II – PROFIT & LOSS STATEMENT Name of the Company…………………….. Profit and Loss statement for the year ended…………. Particulars Note No. Figures as at the end of current reporting period Figures as at the end of the previous reporting period CONTINUING OPERATIONS Revenue from operations (gross) Other income (a) Cost of materials consumed (b) Purchases of stock-in-trade (c) Changes in inventories of finished goods, work-in progress and stock-in-trade (d) Employee benefits expense (e) Finance costs (f) Depreciation and amortisation expense (g) Other expenses Extraordinary items Extraordinary items Tax expense:(I) Current tax expense for current year (II) Deferred tax Profit V(loss) from discontinuing operations Tax expense of discontinuing operations Earnings per equity share:(1) Basic (2) Diluted EXAM QUESTIONS AUDIT-MAY-14 Q.1 KAY Ltd. is in the process of finalizing its accounts for year ended 31st March,2014andfurnishes the following information: (I) Finished goods normally are held for 30 days before sale. (ii) Sales realization from Debtors usually takes 60 days from date of credit invoice. (iii) Raw materials are held in stock to cover one month’s production requirements. (iv) Packing materials, being specifically made for the company and having lead time of 90 days is held in stock for 90 days. (v) The holding period in respect of unfinished goods is 30 days. (vi) Being a monopoly KAY Ltd. enjoys a credit period of 12.5 months from its suppliers who sometimes at the end of their credit period opt for conversion of their dues into long term debt of KAY Ltd. You are required to compute the operating cycle of KAY Ltd. as per revised Schedule III of Companies Act, 1956. As the suppliers of the company are paid off after a credit period of 12.5 months should this be part of Current Liability? Would your answer be the same if the creditors are settled in 330 days? (a) Operating cycle of Kay Ltd. will be computed as under: Raw material stock holding period + Work-in-progress holding period + Packing Materials holding period+ finished goods holding period + Debtors collection period = 1 + 1 + 3 + 1 + 2 = 8 months Classification of liability to suppliers: Schedule III provides that: —A liability shall be classified as current when it satisfies any of the following criteria: i. It is expected to be settled in the company’s normal operating cycle; ii. It is held primarily for the purpose of being traded; iii. It is due to be settled within twelve months after the reporting date; or’ iv. the company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counter party, result in its settlement by the issue of equity instruments and do not affect its classification. There are two situations: a. When credit period given by supplier is 12.5 months: The nature of classification of liability is to be seen with reference to the reporting date. Hence all liabilities except those that arise in the last fortnight of the accounting period will be—Current as this will have to be settled within 12 months of the reporting date. Thus, all liabilities that do not arise in the last fortnight of the accounting period will be —Non – Current. b. When credit period given by suppliers is 330 days (i.e. 11 months approx.): If the   Creditors are settled in 330 days i.e. within 11 months. This satisfies the third condition i.e. it is due to be settled within twelve months after the reporting date and there is no option to defer it. Hence, in the case it will be treated as current liability . AUDIT-May-13 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 Accounting Standards issued by NFRA. ‘ March, 13 March, 12 Share Capital Reserves & Surplus Employee stock option outstanding Share application money Deferred tax liability((Arising from Indian Income Tax) Trade Payables Fixed Assets-Tangible CWIP (including capital advances) Trade Receivables Deferred Tax Asset((Arising from Indian Income Tax) P&l Debit balance Following Errors are noticed in presentation as per Schedule III: (I) Share Capital & Reserve & Surplus are to be reflected under the heading Shareholders’ funds, which is not shown while preparing the balance sheet. Although it is a part of Equity and Liabilities yet it must be shown under head Shareholders ‘funds. The heading Shareholders ‘funds is given in the question missing in the balance sheet. (ii) Reserve & Surplus is showing zero balance, which is not correct in the given case. Debit balance of statement of profit & Loss should be shown as a negative figure under the head Surplus’. The balance of Reserves and Surplus’, after adjusting negative balance of surplus shall be shown under the head Reserves and Surplus ‘even if the resulting figure in negative. (iii) Schedule III of Companies Act, 2013 requires that Employee Stock Option outstanding should be disclosed under the heading Reserves and Surplus (iv) Share application money refundable shall be shown under the sub-heading Other Current Liabilities. As this is refundable and not pending for allotment, hence it is not a part of equity. (v) Deferred Tax Liability has been correctly shown under Non-Current Liabilities. But Deferred tax assets and deferred tax liabilities, both, cannot be shown in balance sheet because only the net Balance of Deferred Tax Liability or Asset is to be shown. (vi) Under the main heading of Non-Current Assets, Fixed Assets are further classified as under: I. Tangible assets II.     Intangible assets III. Capital work in Progress       IV. Intangible assets under development. Keeping in view the above, the CWIP shall be shown under Fixed Assets as Capital Work in Progress. The amount of Capital advances included in CWIP shall be disclosed under the sub heading Long term loans and advances under the heading Non-CurrentAssets. (vii) Deferred Tax Asset shall be shown under Non-Current Asset. It should be the net balance of Deferred Tax Asset after adjusting the balance of deferred tax liability. AUDIT-NOV-12 Q.3 H Ltd. engaged in the business of manufacturing lotus wine. The process of manufacturing this wine takes around 18 months. Due to this reason H Ltd. has prepared its financial statements considering its operating cycle as 18 months and accordingly classified the raw material purchased and held in stock for less than 18 months as current asset. Comment on the accuracy of the decision and the treatment of asset by H Ltd. As per Schedule III of Companies Act, 2013. 1. As per Schedule III of Companies Act, 2013 , one of the criteria for classification of an asset as a current asset is that the asset is expected to be realised in the company’s operating cycle or is intended for sale or consumption in the company’s normal operating cycle. 2. Further, Schedule III of Companies Act, 2013 defines that an operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. 3. However, when the normal operating cycle cannot be identified, it is assumed to have duration of 12 months. As per the facts given in the question, the process of manufacturing of lotus wine takes around 18 months; therefore, its realisation into cash and cash equivalents will be done only when it is ready for sale i.e. after 18 months. 4. This means that normal operating cycle of the product is 18 months. Therefore, the contention of the company’s management that the operating cycle of the product lotus wine is 18 months and notl2 months is correct. H. Ltd. will classify the raw material purchased 8cheld in stock as current asset in Companies Act Companies Act 2013 « Previous Article Next Article » Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects. Join Our whatsApp Group Join Our Telegram Group 21 Comments Nice explanation but there is no explanation for profit and loss account. WHY? There are (a) to (l) number of points for the notes regarding Share Capital. Is it mandatory to mention all the points even if those are NIL for the respective company? It is written in a simplified manner and was very helpful but there is no explanation on the items of profit & loss. Can you give your write ups for fundamental analysis as per schedule III balance sheet and P/L, that is formulas used for balance sheet and profit and loss? The operating cycle is more than 12 months , Now if we raw material that to be sold after 18 month,How can be current Assets. if suplier is giving 12.5 credit this is non currents liability and non current assets.Then why this is 18 months current assets. pla simplify. very useful Excellent For Students and Practioners Very nice sir…share these type of knowledge with updatadation Well done sir,,,,quite useful…. how the interim dividends adjusted in both statements Plz clarify provisions regarding treatment of Discount on issue of shares/debentures. it is very helpful for students to understand about Balance Sheet. Nice and informative article. Plz clarify provisions regarding treatment of Discount on issue of shares/debentures. very nice compilation where duty draw back receivable on exports should be disclose? plz tell me advice It is Beneficial for students. quite useful nice article Nov 2012 Audit Question Inventory is pre classified As current asset. Therefore it need not be put to those 4 tests given in the definition of current assets. Leave a Comment Your email address will not be published. Required fields are marked * Post Comment Subscribe to Our Daily Newsletter Latest posts, circular issued by cbic would be applicable on central gst officers only, bail can be granted to an accused of furnishing purchases from fake suppliers if trial is prolonged, itc can be claimed on contract staffing services for providing information technology enabled services, acquisition & transfer of immovable property in india by nri/oci: fema regulations, 2018, exceptions from bank guarantees: development of ‘special equities’ in indian courts, an ultimate guide: how non-resident indians (nri’s) can effortlessly transfer indian assets to their children living abroad, budget 2024: buyback provisions under section 115qa and section 10(34a), csr expenses: a comprehensive analysis of tax deductibility, section 69a not invocable as cash deposit sources duly maintained: itat ahmedabad, addition u/s 68 for unexplained cash credit unjustified as sale of shares reflected in p&l, featured posts, permanent account number (pan), tax deduction/collection account number (tan), non-appointment of cs: mca deletes penalty of independent directors, income tax audit under section 44ab​: faqs, fcra fraud alert: ministry of home affairs issues warning against fake emails, income tax provisions applicable to non-residents, failure to obtain & submit secretarial audit report: mca imposes penalty, flying abroad don’t leave without income tax clearance certificate, computation of income tax: faqs & examples, clubbing of income under income tax act, 1961 with faqs, popular posts, due date compliance calendar august 2024, carry forward and set off of losses with faqs, list of resolution required to be filed with roc in form mgt-14, tax deducted at source (tds): faqs, faqs on income from house property, taxation of capital gain in india – faqs, taxability of gift received by an individual or huf with faqs. August 2024 M T W T F S S   29 30 31   Skip to main content Skip to navigation legislation.gov.uk Explore our Collections New Legislation Help and Guidance Changes to Legislation Search legislation, companies act 2006, you are here:. UK Public General Acts Group accounts: general Section 408 Table of Contents Previous: Provision Next: Provision Print Options What version. Latest available (Revised) Original (As enacted) Advanced Features Show Geographical Extent (e.g. E ngland, W ales, S cotland and N orthern I reland) Show Timeline of Changes Opening Options Open whole Act Open Act without Schedules Open Schedules only More Resources Original: King's Printer Version Original: King's Printer Version Volume 1 Original: King's Printer Version Volume 2 Original: King's Printer Version Volume 3 Correction Slip - 15/10/2010 Changes over time for: Section 408 Alternative versions:. 06/04/2008 - Amendment 01/10/2013 - Amendment 06/04/2015 - Amendment 17/05/2016 - Amendment Changes to legislation: Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing. Changes and effects yet to be applied to the whole Act associated Parts and Chapters: Act amendment to earlier affecting provision S.I. 2008/373 reg. 11(1) by S.I. 2013/1971 reg. 9(a) (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2) Act amendment to earlier affecting provision S.I. 2008/373 reg. 3(4) by S.I. 2013/1971 reg. 4 (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2) Whole provisions yet to be inserted into this Act (including any effects on those provisions): s. 479A(2)(c)(zi) inserted by S.I. 2019/177 reg. 4(b)(i) (This amendment not applied to legislation.gov.uk. Reg. 4 substituted by regs. 4, 4A immediately before IP completion day by S.I. 2019/1392, regs. 1(2), 4) Sch. 2 Pt. 2 Section (A) para. 25(m) inserted by 2024 c. 13 Sch. 30 para. 30 Sch. 2 Pt. 2 Section (A) para. 25(j) omitted by 2024 c. 13 Sch. 21 para. 10 Sch. 2 Pt. 2 Section (A) para. 28 words substituted by 2024 c. 13 Sch. 18 para. 9(2)(a)(i) Sch. 2 Pt. 2 Section (A) para. 29 words substituted by 2024 c. 13 Sch. 18 para. 9(2)(a)(ii) Sch. 2 Pt. 2 Section (A) para. 36 words substituted by 2024 c. 13 Sch. 18 para. 9(2)(b) Sch. 10 para. 6(2D) inserted by S.I. 2019/177 reg. 28(e) (This amendment not applied to legislation.gov.uk. Reg. 28(e) omitted immediately before IP completion day by virtue of S.I. 2020/523, regs. 1(2), 14(e)(iv)) Sch. 10 para. 7(2A) inserted by S.I. 2019/177 reg. 29(b) (This amendment not applied to legislation.gov.uk. Reg. 29 substituted immediately before IP completion day by S.I. 2020/523, regs. 1(2), 14(f)) 408 Individual profit and loss account where group accounts prepared U.K. (1) This section applies where— (a) a company prepares group accounts in accordance with this Act, and [ F1 (b) the company’s individual balance sheet shows the company’s profit and loss for the financial year determined in accordance with this Act. ] F2 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) The company's individual profit and loss account must be approved in accordance with section 414(1) (approval by directors) but may be omitted from the company's annual accounts for the purposes of the other provisions of the Companies Acts. (4) The exemption conferred by this section is conditional upon its being disclosed in the company's annual accounts that the exemption applies. Textual Amendments F1 S. 408(1)(b) substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 (S.I. 2015/980) , regs. 2(1) , 5(12)(a) (with reg. 3 ) F2 S. 408(2) omitted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by virtue of The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 (S.I. 2015/980) , regs. 2(1) , 5(12)(b) (with reg. 3 ) Modifications etc. (not altering text) C1 Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298) , regs. 1 , 97 (with regs. 140-145 ) (as amended by S.I. 2020/523 , regs. 1(2) , 5(a)-(f) ); 2020 c. 1 , Sch. 5 para. 1(1) ) C2 Ss. 402-406 applied (with modifications) (1.10.2009) by The Overseas Companies Regulations 2009 (S.I. 2009/1801) , reg. 38 (with Sch. 8 ) C3 Ss. 402-406 applied (with modifications) (1.10.2009) by The Overseas Companies Regulations 2009 (S.I. 2009/1801) , reg. 53 (with Sch. 8 ) C4 Ss. 380-414 applied (with modifications) (1.10.2009) by S.I. 2009/2436 , regs. 3-5 , Sch 1 para. 10 (with reg. 7 , Sch. 2 ) (and the said Sch. 1 para. 10 is amended (with application in accordance with reg. 1(3) of the amending S.I.) by The Unregistered Companies (Amendment) Regulations 2013 (S.I. 2013/1972) , regs. 1(2) , 2(2)(a) ) C5 Ss. 398-408 applied (with modifications) (1.10.2008) by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 (S.I. 2008/1911) , reg. 10 (as amended (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575) , regs. 2(1) , 9 ); (with effect in accordance with reg. 2(5)(b) of the amending S.I.) by The Statutory Auditors Regulations 2017 (S.I. 2017/1164) , reg. 1(2)(3) , Sch. 3 para. 3 (with reg. 2(6)(7) ); (31.12.2020) by The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/685) , reg. 1(2) , Sch. 1 para. 58(4) (with reg. 1(3)-(8) , Sch. 1 para. 65 ) (as amended by S.I. 2020/335 , regs. 1 , 3 , 4 and S.I. 2020/523 , regs. 1(2) , 22 , 25(c) ); 2020 c. 1 , Sch. 5 para. 1(1) ; and (31.12.2020 with effect in relation to financial years beginning on or after IP completion day) by The Accounts and Reports (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/145) , regs. 1(2)(b) , 2 , Sch. 3 para. 16 (with reg. 7(2) ) (as amended by S.I. 2020/523 , regs. 1(2) , 10 , 11 ); 2020 c. 1 , Sch. 5 para. 1(1) ) Back to top Options/Help Print the whole act. PDF The Whole Act Web page The Whole Act Print The Whole Part PDF The Whole Part Web page The Whole Part Print The Whole Chapter PDF The Whole Chapter Web page The Whole Chapter Print The Whole Cross Heading PDF The Whole Cross Heading Web page The Whole Cross Heading Print This Section only PDF This Section only Web page This Section only You have chosen to open The Whole Act The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run. Would you like to continue? Continue to open You have chosen to open The Whole Act as a PDF The Whole Act you have selected contains over 200 provisions and might take some time to download. You have chosen to open The Whole Act without Schedules The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run. You have chosen to open The Whole Act without Schedules as a PDF The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You have chosen to open the Whole Act You have chosen to open the whole act without schedules, you have chosen to open schedules only. The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run. Legislation is available in different versions: Latest Available (revised): The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area. Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text. See additional information alongside the content Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’. Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box. Different options to open legislation in order to view more content on screen at once Explanatory Notes Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts. Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include: the original print PDF of the as enacted version that was used for the print copy lists of changes made by and/or affecting this legislation item confers power and blanket amendment details all formats of all associated documents correction slips links to related legislation and further information resources Timeline of Changes This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help. Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include: Click 'View More' or select 'More Resources' tab for additional information including: New site design Accessibility Privacy Notice 430 COMMENTS Companies Act 2006 426B. Section 172 (1) statement to be made available on website. (1) This section applies if—. (a) a company is required by section 414CZA to include a section 172 (1) statement in its strategic report for a financial year, and. (b) the company is an unquoted company in relation to that financial year. SCHEDULE 1 PART 1 GENERAL RULES AND FORMATS SECTION A GENERAL RULES. 1. —(1) Subject to the following provisions of this Schedule— (a) every balance sheet of a company must show the items listed in either of the balance sheet formats in Section B of this Part, and (b) every profit and loss account must show the items listed in any one of the profit and loss account formats in Section B. Companies Act 2006 Companies Act 2006, Chapter 4 is up to date with all changes known to be in force on or before 15 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. ... the date of the statement, and (f) the financial year to which the guarantee ... Financial statements: Companies Act 2006 requirements An outline of the requirements for a company's financial statements (balance sheet, profit and loss account and notes to the accounts) under the Companies Act 2006 and related regulations, for financial years beginning on or after 1 January 2016, across different sizes of company and different accounting frameworks that can be applied under UK law. PDF Technical factsheet Consolidated financial statements Section 399(2) of the Companies Act 2006 states that if, at the end of the year, a company is a parent company, the directors must prepare group accounts for the year as well as individual accounts unless the company is exempt from the requirement. The Companies Act 2006 provides an exemption from preparing consolidated financial statements UK regulation for company accounts Published: 10 Sep 2019. The Companies Act 2006 (CA 2006) requires directors to ensure that the annual accounts give a true and fair view. In this section the Corporate Reporting Faculty provides an overview of UK financial reporting regulation for different types of company. Part 15 of CA 2006 includes requirements relating to the preparation ... Schedule 3 of Companies Act, 2013 : General Instructions for SCHEDULE III[1] (See section 129) [Effective from 1st April, 2014] [2][Division I Financial Statements for a company whose Financial Statements are required to comply with the Companies (Accounting Standards) Rules, 2006. GENERAL INSTRUCTIONS FOR PREPARATION OF BALANCE SHEET AND STATEMENT OF PROFIT AND LOSS OF A COMPANY] General Instructions 1. Where compliance with the requirements Accounting and Reporting under Companies Act 2006 in the UK The accounting and reporting requirements under the CA 2006 are designed to ensure that shareholders and other stakeholders have access to accurate and reliable information about the financial performance and position of a company. The requirements also help to protect creditors and other third parties by ensuring that companies are transparent ... PDF 5 Form and content of the annual report and accounts 15 the Companies Act 2006, plus associated statutory instruments, with interpretation for the public sector context. The remaining chapters of Part 15 will not apply. Part 15 of the Companies Act 2006 where appropriate. If this chapter does not refer to specific chapters or sections of that Part, then those chapters and sections do not PDF Preparation and Presentation of Companies Final Accounts Section 128(1) of Companies Act, 2013 requires that every company shall prepare and keep at its registered office, books of account and. relevant books and papers and financial statements for every financial year which give a true and fair view of the state of affairs of the company, including that of its branch office or offices, if any Note ... PDF Final Guidance Note on Ind AS Schedule III to the Companies Act%2c 2013 required to prepare Financial Statements as per Companies (Accounting Standards) Rules, 2006, as per the format of Division I to Schedule III to the Act; 1.2.2 'Division II' - 'Ind AS Schedule III' (Refer Annexure A, Pg 100 ) was inserted to give a format of Financial Statements for companies that are required to comply with the Companies PDF Financial Statements Presentation under Companies Act, 2013 Financial Statements Presentation under Companies Act, 2013… 2 Financial Statements under Companies Act, 2013 Financial Statement: Section 2(40) Financial Statement in relation to a company, includes- (i) a balance sheet as at the end of the financial year; (ii) a profit and loss account, or in case of company carrying out activity s80 Financial Statements (3) The financial statements must be prepared by the company within 6 months of the date of deposit of the demand. (4) A company that contravenes subsection (1) commits an offence. [S 80A inserted by Companies (Amendment) Act 2009 s 29.] 80B Additional provisions concerning presentation of financial statements Companies Act 2006 Companies excluded from being treated as medium-sized. 468. General power to make further provision about accounts and reports. 468A. Use or disclosure of profit and loss accounts for certain companies. 469. Preparation and filing of accounts in euros. 470. Power to apply provisions to banking partnerships. IAS 1 Presentation of Financial Statements Amendments to IAS 1 Presentation of Financial Statements have been issued to clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. Highlighting different perspectives on the IASB's Exposure Draft, starting with ICAEW's views. True and Fair statement published by FRC The true and fair override, as noted by the FRC, is enshrined in both FRS 102 and IFRS (specifically IAS 1, Presentation of Financial Statements) ... The FRC statement stresses that auditors are legally obliged, under Companies Act 2006, to state, when giving their opinion on a company's financial statements, whether the accounts, in their ... Chapter 2: Companies Act 2006 Issues : UK Financial Statements Chapter 2: Companies Act 2006 Issues. UK Financial Statements: Presentation and Disclosure Requirements. Author: Steve Collings Publisher: Bloomsbury Professional PDF UK GAAP (FRS 102) illustrative financial statements accordance with the requirements of Part 15 of the Companies Act 2006 and 'The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008' (SI 2008/410). These financial statements also include voluntary disclosures that illustrate certain aspects of disclosure under FRS 102. PDF Technical Factsheet 187 Companies Act 2006 and the accounting and disclosure requirements within the related accounting regulations, FRS 18 Accounting policies, Financial Reporting Standard for Smaller Entities 2008 (FRSSE ... Presentation of Financial Statements deems the foreseeable future to be a period of 12 months from the entity's reporting date. It should be ... Financial Statements-Schedule-III 4. It is also provided that the financial statements shall be prepared in the form provided in new schedule III of Companies Act, 2013. 5. It may be noted that in the new schedule III the provisions for preparation of balance sheet and statement of profit and loss have been given which are on the same lines as in the existing schedule VI. 6. Companies Act 2006 408 Individual profit and loss account where group accounts prepared. (1) This section applies where—. (a) a company prepares group accounts in accordance with this Act, and. [ F1 (b) the company's individual balance sheet shows the company's profit and loss for the financial year determined in accordance with this Act.] PDF Framework for the Preparation and Presentation of Financial Statements ond. the scope of this Framework.The Objective of Financial Statements12. The objective of financial statements is to provide information about the financial position, performance and cash flows of an enterpris. th. t is useful to a wide range of users in making economic decisions.13. Financial st. Companies Act 2006 Required subscriptions. Companies Act 2006 Part 1 General Introductory Provisions Part 2 Company Formation Part 3 A Company's Constitution Part 4 A Company's Capacity and Related Matters Part 5 A Company's Name Part 6 A Company's Registered Office [and Email Address] Part 7 Re-Registration as a Means of Altering a Company's Status Part 8 A ... Office of the Comptroller of the Currency (OCC) Acting Comptroller Issues Statements on Bank Liquidity and Bank Resolvability. ... Financial Data Transparency Act of 2022: Notice of Proposed Rulemaking. Bulletin; Aug 15, 2024 ... The OCC safeguards a diverse banking system that makes financial services accessible to underserved consumers and communities. More More. assignment essay homework paper phd report resume review speech thesis