revised schedule vi
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REVISED SCHEDULE VI OF THE COMPANIES ACT, 1956
A Comparison with Old Schedule VI
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EFFECTIVE DATE
Financial Year commencing on or after 01-April-2011
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(REVISED SCHEDULE VI) V/S (ACT & AS)
‘Act & AS’ will prevail
Provisions given in the Companies Act, 1956 & AS specified by the Accounting Standard Rules of 2006, has precedence over Revised Schedule VI to the extent the disclosure requirements / treatment of the revised schedule VI is not consistent with the provisions or the AS.
Disclosure as per Revised Schedule VI is in addition to other accounting / disclosure requirements.
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CURRENT AND NON-CURRENT ASSET
Current
(a) it is expected to be realized 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 realized 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.
Non-Current
All other assets shall be classified as non-current.”
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CURRENT AND NON-CURRENT LIABILITY
Current(a) it is expected to be settled in the company’s
normal operating cycle;(b) it is held primarily for the purpose of being traded(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.
Non-CurrentAll other liabilities shall be classified as non-current
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NOMENCLATUREEQUITY AND LIABILITIES
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FORMAT OF BALANCE SHEET Apr 9
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Old Schedule VI Revised Schedule VI
Horizontal or Vertical Vertical Only
EQUITY Apr 9
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Old Schedule VI Revised Schedule VI
Earlier no separate disclosure on the face of balance sheet
Money received against share warrants
Earlier no separate disclosure on the face of balance sheet
Share application money pending allotment
DEPOSIT LIABILITY
Old Schedule VI Revised Schedule VI
Deposit liability – no distinction between long term and short term.
To be disclosed under the long-term borrowings unless it has current maturity in which case to be grouped under short term borrowings.
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FIXED ASSETS
Old Schedule VI Revised Schedule VI
No bifurcation required into tangible & intangible assets.
To be shown under non-current assets and it has to be bifurcated in to Tangible & intangible assets.
TangibleIntangibleCWIPIntangible under development
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BORROWINGS
Old Schedule VI Revised Schedule VI
Short term & long term borrowings are grouped together under the head Loan funds sub-head Secured / Unsecured
Long term borrowings to be shown under non-current liabilities and short term borrowings to be shown under current liabilities with separate disclosure of secured / unsecured loans.
Period and amount of continuing default as on the balance sheet date in repayment of loans and interest to be separately specified
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FINANCE LEASE OBLIGATION
Old Schedule VI Revised Schedule VI
Included in current liabilities Included in Non-current liabilities.
However, short term maturities of Fin Lease obligation to be grouped under current liabilities only.
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DEPOSIT ASSET Apr 9
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Old Schedule VI Revised Schedule VI
Lease deposits are part of loans & advances
Lease deposits to be disclosed as long term loans & advances under the head non-current assets unless they are of current nature
INVESTMENTS Apr 9
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Old Schedule VI Revised Schedule VI
Both current & non-current investments to be disclosed under the head investments
Current and non-current investments are to be disclosed separately under current assets & non-current assets respectively.
Investments carried at other than cost should be separately disclosed and the basis of its valuation to be disclosed
LOANS & ADVANCES Apr 9
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Old Schedule VI Revised Schedule VI
Loans & Advance are disclosed along with current assets
Loans & Advances to be broken up in long term & short term and to be disclosed under non-current & current assets respectively.
Loans & Advance to related parties to be disclosed separately.
NET WORKING CAPITAL
Old Schedule VI Revised Schedule VI
Current assets & Liabilities are Netted off and Net Working Capital amount is shown
Assets & Liabilities are to be bifurcated in to current & Non-current and to be shown separately. Hence, net working capital will not be appearing in Balance sheet.
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DEFERRED TAX ASSETS / LIABILITIES Apr 9
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Old Schedule VI Revised Schedule VI
Deferred Tax assets / liabilities to be disclosed separately
Deferred Tax assets / liabilities to be disclosed under non-current assets / liabilities as the case may be.
Not to be disclosed as current.
CASH & BANK BALANCES Apr 9
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Old Schedule VI Revised Schedule VI
Bank balance to be bifurcated in scheduled banks & others
- Bank balances in relation to earmarked balances, -held as margin money against borrowings, -deposits with more than 12 months maturity,
each of the above to be shown separately.
LOSS Apr 9
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Old Schedule VI Revised Schedule VI
Debit balance in profit and loss account to be shown under the head Miscellaneous expenditure & losses.
To be shown as negative figure under the head Surplus. Therefore, reserve & surplus balance can go negative.
SUNDRY CREDITORS Apr 9
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Old Schedule VI Revised Schedule VI
Creditors to be broken up in to micro & small suppliers and other creditors.
No mention of micro & small enterprise disclosure.
However, it is continued to be disclosed under Micro, Small andMedium Enterprises Development (MSMED) Act, 2006.
OTHER CURRENT LIABILITIES Apr 9
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Old Schedule VI Revised Schedule VI
Current maturities of long term debt need not be disclosed on the face separately.
Current maturities of long term debt to be disclosed under other current liabilities.
Current maturities of finance lease obligation need not be disclosed on the face separately.
Current maturities of finance lease obligation to be disclosed hereunder separately.
NOMENCLATURE“STATEMENT OF PROFIT AND LOSS”
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Old Schedule VI Revised Schedule VI
Any item under which expense exceeds one per cent of the total revenue of the company or Rs. 5,000 which ever is higher; shall be disclosed separately
Any item of income / expense which exceeds one per cent of the revenue from operations or Rs. 1,00,000, which ever is higher; to be disclosed separately
SEPARATE LINE ITEM
REVENUES Apr 9
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Old Schedule VI Revised Schedule VI
Sales for each class of goods to be separately shown indicating the quantities of such sales - (Quantitative sales
Quantitative details are done away with.
PURCHASES AND CONSUMPTION Apr 9
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Old Schedule VI Revised Schedule VI
Required both value and quantitative disclosure in respect of Raw Materials and traded goods.
Disclosure of quantitative details of goods purchased is no longer required.
However, values to be classified under broad heads.
As per ICAI exposure draft on Revised Schedule VI – Quantitative details disclosure is not required.
EMPLOYEE COMPENSATION Apr 9
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Old Schedule VI Revised Schedule VI
Earlier not required separately Employee stock option expense to be shown separately
FINANCE COST Apr 9
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Old Schedule VI Revised Schedule VI
Interest Cost• Company’s Debentures• On Fixed Loans• Paid to Managing Director / Manager
• Interest Expenses• Other borrowing costs• Gain / Loss on foreign currency translations / transactions (finance cost portion only – forex fluctuation on interest paid in foreign currency)
OTHER CHANGES
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ROUNDING OFF
Old Schedule VI Revised Schedule VI
Turnover of less than Rs. 100 Crs - R/off to the nearest Hundreds, thousands or decimal thereof
Turnover of Rs. 100 Crs or more but less than Rs. 500 Crs - R/off to the nearest Hundreds, thousands, lakhs or millions or decimal thereof
Turnover of Rs. 500 Crs or more - R/off to the nearest Hundreds, thousands, lakhs, millions or crores, or decimal thereof
Turnover of less than Rs. 100 Crs - R/off to the nearest Hundreds, thousands, lakhs or millions or decimal thereof
Turnover of Rs. 100 Crs or more - R/off to the nearest lakhs, millions or crores, or decimal thereof
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COMPARATIVES
Comparatives has to be compliant with Revised Schedule VI and amounts need to be given for the financial year 2010-11 in the revised Schedule VI format.
First set of financials compliant with revised Schedule VI will be for the year 2011-12
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INTERIM FINANCIAL REPORTING Apr 9
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Companies presenting Condensed interim financialstatements
Companies presenting Complete set of financial statements
Company need not comply with Revised Schedule VI requirements
Company should comply with Revised Schedule VI requirements from Financial year 2012-13 and onwards only.
AUDITOR’S APPROACH - SUGGESTED
Verify audit evidence which goes to substantiate the expected timelines of realisation of assets or settlement of liabilities to ensure proper bifurcation between current and non-current.
Ask the clients in advance to be prepared with the new format requirements with necessary backup / supporting.
Make use of tailored procedures / disclosure checklists to ensure complete disclosure.
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TAKE AWAY
Current and Non-Current
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THANK YOU Apr 9
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