financial statements accounts 1 – ipcc ca kiran vasant trisha classes
TRANSCRIPT
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FINANCIAL STATEMENTSACCOUNTS 1 – IPCCCA KIRAN VASANTTRISHA CLASSES
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Maintenance of Books of Accounts (Sec 209)
Where?Regd. Office unless
BOD decide elsewhere
For Branches:Returns of period intervals of not
more than 3 months sent within reasonable time to
HO
What?Money received &
spentPurchases & SalesAssets & Liabilities
Cost records
Proper books not deemed to be kept:Where it does not
give a true and fair view
When accrual system is not
followed
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Statutory Books
Register of Mortgages &
Charges
Register of Members & Index
Register of Debenture Holders
& Index
Foreign Register of Members & of
Debenture holders & their Duplicates
Minute Books
Register of Contracts,
Companies and Firms in which the
Directors are interested
Register of Directors,
Managing Director, Manager & Secretary
Register of Director’s
ShareholdingRegister of
Investments in securities of any
other body corporate, loans
made, guarantees
Registers & Documents
relating to the issue of shares
Register Of Investments not held in its own
name
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Annual Return
Sec 149All companies having share
capital
60 days from day of AGM
Annual return containing the particulars in Part I of Sch V
Form as per Part II of Sch V
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Final Accounts u/s 210 – for companies carrying on business for profit
Balance sheet
Profit & Loss
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Final Accounts u/s 210 – for companies not carrying on business for profit
Balance sheet
Inc & Exp a/c
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Prescribed Forms
• Insurance Companies• Banking Companies• Electricity Companies• Such other where the
governing Act prescribes form
Specific Act is
applicable
• Balance Sheet as per Form set out in Part I of Schedule VI or near thereto as circumstances admit
• Profit and Loss Account as per Part II of Schedule VI
No specific Act is
applicable
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Points to be borne in mind while preparing Financial StatementsRevised Schedule VIOther Statutory RequirementsAccounting Standards (1 to 32)Statements and Guidance Notes
issued by the ICAI
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Compliance to Accounting StandardsNote: Sub-sections 3A, 3B & 3C in
Sec 211 makes it mandatory for companies to comply with AS
Where P&L or BS do not comply, the company shall disclose◦Deviation from the Accounting
Standards◦The reasons for such deviation◦The financial effect due to such
deviation
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Revised Schedule VIApplicable since Feb 28, 2011
◦General Instructions under Schedule VI1. Modification in Schedule VI to comply
with AS2. Disclosure requirements3. Information content in Notes to
accounts4. Rounding off requirements5. Previous years’ figures6. Terms used in Financial Statements
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1. Modification in Sch VI w.r.t. ASWhere compliance with the
requirements of the Act including AS as applicable to the companies require any change in treatment or disclosure including◦Addition◦Amendment◦Substitution or◦Deletion in the head/sub-head in FS
The requirements of the Schedule VI shall stand modified accordingly
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2. Disclosure requirementsThe disclosure requirements specified in Part
I and Part II of this schedule are in addition to and not in substitution of disclosure requirements specified in the AS.
Additional disclosures specified in the AS shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of 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.
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3. Notes on Accounts
Notes on accounts shall contain additional information and shall providea. Narrative descriptions or
disaggregation of items recognized in those statements
b. Information about items that do not qualify for recognition in those statements
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4. Rounding off rules
• The nearest hundreds, thousands, lakhs or millions, or decimals thereof
Turnover is less
than100 Crore
rupees
• To the nearest, lakhs, millions or crores or decimals thereof
Turnover is more than 100 crore
rupees
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5. Previous year’s figuresExcept for first financial
statementsCorresponding amounts for the
immediately preceding reportIncluding notes on accounts shall
also be given
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PART I – FORM OF BALANCE SHEETName of the companyBalance sheet as at-----
Particulars Notes No.
C.Y. P.Y.
EQUITY AND LIABILITIES
1.
Shareholders’ funds
2.
Share application money pending allotment
3.
Non-Current Liabilities
4.
Current Liabilities
Total
ASSETS
1 Non-current Assets
2 Current Assets
Total
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I. EQUITY AND LIABILITIES
Shareholder's Funds ◦Share Capital ◦ Reserves and Surplus◦Money received against share
warrants
Share application money pending allotment
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I. EQUITY AND LIABILITIES
Non-Current Liabilities◦Long-term borrowings ◦Deferred tax liabilities (Net) ◦Other Long term liabilities◦Long term provisions
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I. EQUITY AND LIABILITIES
Current Liabilities ◦ Short-term borrowings◦ Trade payables ◦Other current liabilities◦Short-term provisions
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II. Assets Non-current assets :
◦ Fixed assets: Tangible assets Intangible assets Capital work-in-progress Intangible assets under development
◦ Non-current investments◦ Deferred tax assets (net) ◦ Long term loans and advances◦ Other non-current assets
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II. Assets
Current assets ◦ Current investments ◦ Inventories ◦ Trade receivables◦ Cash and cash equivalents◦ Short-term loans and advances◦ Other current assets
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GENERAL INSTRUCTION FOR PREPARATION OF BALANCE SHEET
An asset shall be classified as current when it satisfies any of the following criteria:◦ It is expected to be realized in or is intended for
sale or consumption in, the company’s normal operating cycle:
◦ It is held primarily for the purpose of being traded:
◦ It is expected to be realized within twelve months after reporting date: or
◦ 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.
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GENERAL INSTRUCTION FOR PREPARATION OF BALANCE SHEETAn operating cycle
◦is the time between the acquisition of asset for processing but their realization in cash or cash equivalents.
◦Where the normal operating cycle cannot be identified, it is assumed to have a duration of 12 months.
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GENERAL INSTRUCTION FOR PREPARATION OF BALANCE SHEET
A liability shall be classified as current when it satisfies any of the following criteria:◦ It is expected to be settled in the company’s
normal operating cycle;◦ It is held primarily for the purpose of being
traded;◦ 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.
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GENERAL INSTRUCTION FOR PREPARATION OF BALANCE SHEETA 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.
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.
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MANAGERIAL REMUNERATION
Remuneration for the purpose of Sec 198, 309, 310, 311, & 387, shall include:
Rent free accommodation, any other benefit, amenity in respect thereof;
Any other benefit or amenity provided free of charge or at a concessional rate;
Any obligation or service which would otherwise be occurred by them;
Life Insurance premia for gratuity, pension, annuity on own life or spouse
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CEILING ON REMUNERATION
OVERALL CEILING
MAXIMUM 11%
MANAGER387
PART- TIME309(4)
WITH MD/ WTD309(3)
ONE5%
>ONE
10%
5%WITH
MD/WTD
1%
NO MD/WTD
3%
% OF ELIGIBLE PROFIT
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ELIGIBLE PROFITSDEDUCTIONS / DEBITS CREDITS / (INCOME)
* All usual working charges * Bounties and subsidies from Government* Bonus or commission to staff unless expressly disallowed by disburser* Tax on Abnormal profits * Revnue profit from sale of assets* Interest on Debentures and loans* Expenses on repairs* Donations not exceeding 50,000 or 5% of
average profits of last 3 years whicheveris higher
* Depreciation u/s 350 (Sch XIV)
* Income Tax * Securities premium* Any compensation made voluntarily * Profit on sale of forfeited shares* Capital Loss from sale of assets * Capital profits
AL
LO
WE
DN
OT
AL
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MAX REMUNERATION WHEN PROFITS ARE INADEQUATE
EFFECTIVE CAPITAL
REMUNERATION PER MONTH
Less than 1 crore Rs.75,000
Between 1 & 5 Crores
Rs.100,000
Between 5 & 25 Crores
Rs.125,000
Between 25 & 100 Crores
Rs.150,000
100 Crores or more
Rs.200,000
EFFECTIVE CAPITAL
PAID UP CAPITAL (Not application money or advance against shares)
SECURITIES PREMIUM
RESERVES AND SURPLUS (Not revaluation reserve)
Long term Loans
Less: Investments, Losses, Prelim Exp. Etc not yet written off