330498 1002635 Comparison Between Old and New Schedule Vi

7/30/2019 330498 1002635 Comparison Between Old and New Schedule Vi

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A Practical Guide to ev se c e u e

Comparison: Old and New Schedule VI

2012 Authors

All rights reserved. No part of this work covered by thecopyright owners may be reproduced or copied in anyform or by any means (graphic, electronic or mechanical,including photocopying, recording, recording taping, or

2012 AuthorsA Practical Guide to Revised Schedule VI

by Sanjeev Singhal & R. Sankaraiah

n orma on re r eva sys ems w ou e wr enpermission of the publisher and copyright owners.


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A Practical Guide to Revised Schedule VI

1. IntroductionQuick Links

1. Comparison between

Old

and

Revised

Schedule VI: Synopsis

. revised Schedule VI

.

of Schedule VI

3. Additional disclosure requirements

spec e un er rev se c e u e

4. Disclosure req. dispensed with under

revised Schedule VI

5. Presentation of disclosures has undergone

change under revised Schedule VI




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Introduction

Schedule VI notified by as per Notification No.653 (E) dated March 30, 2011 hascome into force for the Balance Sheet and Profit and Loss Account to be preparedfor the financial year commencing on or after 1 42011 in accordance with oldaccounting standards.

With this reform in accounting world, now the financial transactions will be

brought to the notice of all the stake holders in a better presentation broadly inline with international resentation as com ared to conventional statements of balance sheet and profit and loss account in old Schedule VI.

This presentation is developed to give the user a basic comparison between old

and revised Schedule VI.



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Comparison between old and revised

Schedule VI



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Comparison old and revised content of Schedule VI

Synopsis:

Major differences between old and new Schedule VI

or additional disclosure requirements have been specified

requirements have been dispensed with in the revised Schedule VI

change in the revised Schedule VI



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Major differences: Old and revised

Schedule VI



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Major Differences: Parameters

Old Schedule VI New Schedule VI

Comprised of :Part 1: Balance Sheet

Comprises of: Part 3: InterpretationsPart 4: B/S Abstract and Companys General Business

Part 1: Balance SheetPart 2: Statement of Profit and Loss

Profile

Major Major Difference Difference ParametersParameters



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It addresses the issue by clearly providing

whether the Schedule VI overrides the accounting standards.

that the accounting standards will override Schedule VI. Thus AS prevail over Schedule VI.





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Both horizontal and vertical format permitted.

Only vertical format permissible.





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Format of Profit and Loss account is

No prescribed format for Profit and Loss

Account. Only prescribed.

requirements were specified.





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Guidance on presentation of notes to accounts given in addition to information presented in the financial statements. It shall provide wherever

presentation of notes to the accounts.

required;(a) narrative descriptions or disaggregations of items recognised in


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




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requirements specified as per revised



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Share application

money pending allotment

Borrowings Bonds &

DebenturesFixed assets

Intangible assets

Cash and cash equivalentsShareholders

funds

Current & Non current classification

Item Old Schedule VI Revised Schedule VIDisclosure of reconciliation of no. of shares outstanding atbeginning and end of reporting period

Not requiredSeparate disclosure required for each class of share capital

Disclosure of rights, preferences and restrictions attaching to each class of shares including restrictions on distribution of dividends and repayment of capital

Not requiredSeparate disclosure required for each class of share capital

Disclosure of

shares

in

company

held

by

each

shareholder

holding more than 5 % shares specifying no. of shares Not required Separate disclosure required for

held

Calls unpaidCalls unpaid by directors to be disclosed

Calls unpaid (showing aggregate value of calls unpaid by directors and officers) to be disclosed

and contracts /commitments for sale of shares/ disinvestment, including terms and amounts

option on unissued share capital to be disclosed

Separate disclosure

required

for

each class of share capital

Share options outstanding No guidanceRequires separate disclosure under head Reserves and Surplus.



Money received against share warrants No guidanceSeparate disclosure required in B S under head Shareholders Funds.


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Shareholders funds Borrowings

Bonds & Debentures

Fixed assets

Intangible assets

Cash and cash equivalents


Share application

money pending

Item Old Schedule VI Revised Schedule VIShare application money pending allotment (not due for refund) is to be shown as a separate line

Share application money pending allotment No guidance item in B S. This item to be disclosed as a separate head between Shareholders Funds and Non Current Liabilities




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Shareholders funds

Share application


Borrowings Bonds &


Intangible assets

Cash and cash equivalents


Item Old Schedule VI Revised Schedule VIRequired.A liability is classified as current when it satisfies any of the following criteria:

Current and non current classification of liabilities

Not required

(a) it is expected to be settled in companys 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) company does not have an unconditional right to defer settlement of liability for at least12 months after re ortin date.

All other liabilities are classified as non current.

Current and non

Requires a clear bifurcation of assets into current and non current.An asset is classified as current when it satisfies any of the following criteria:

(a) it is expected to be realized in, or is intended for sale or consumption in, companys

current classification of assets

equ res current assets an loans and advances to be shown separately.

norma operating cyc e;

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

(c) it is expected to be realized within 12 months after 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 12 months after reporting date.



All other assets are classified as non current.


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Shareholders funds

Share application



Bonds & Debentures

Fixed assets

Intangible assets

Cash and cash equivalentsBorrowings

Item Old Schedule VI Revised Schedule VI

Disclosure of defaults in case of borrowings

Not required

Required.

To be specified separately in each case of both Long and Short termborrowings for period and amount of continuing default as on the B/S date in

repayment of loans and interest.

Loans and advances from related parties

Separate classification not required

Required. Separate classification under head Long term borrowings or Shortterm, borrowings, as the case may be




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Shareholders funds

Share application



Borrowings Fixed

assetsIntangible

assetsCash and cash

equivalentsBonds &

Debentures


Bonds/debentures (along with ROI and particulars of redemption

Bonds/debentures (along with ROI and particulars of redemption or conversion)

Not required

,descending order of maturity or conversion, starting from farthestredemption or conversion date, as the case may be. Wherebonds/debentures are redeemable by instalments, maturity dateis the first instalment date becomes due.




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Shareholders funds

Share application



Borrowings Bonds &

DebenturesIntangible

assetsCash and cash

equivalentsFixed

assets


sc osure o mpac o acqu s ons roug us ness combinations and impairment (or reversal thereof)

Not required Required




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Shareholders funds

Share application



Borrowings Bonds &


Cash and cash equivalentsIntangible

assets

Item Old Schedule VI Revised Schedule VIIntangible assets to be classified as under:

(a) Goodwill.

Classification of

intangible No guidance on classification

(b) Brands /trademarks.

(c) Computer software.

(d) Mastheads and publishing titles.

(e) Mining rights.

assetso ntang e assets (f) Copyrights, and patents and other intellectual property rights, services and

operating rights.

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

(h) Licenses and franchise.

.




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Shareholders funds

Share application



Borrowings Bonds &


Intangible assets

Cash and cash

equivalents


sc osure o c eques an ra s on an o requ re equ re

Separate disclosure of bank balances with Not required Required

Separate disclosure of repatriation restrictions

Not required Required




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Areas where disclosure requirements

dispensed with

in

revised

Schedule

VI



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Areas where disclosure requirements dispensed with in revised Schedule VI

Shareholders Shareholders fundsfunds

TurnoverTurnover Income from Income from investmentinvestment

Cash & cash Cash & cash e uivalentse uivalents

Interest Interest IncomeIncome

TDSTDS

Opening and Opening and closing stock of closing stock of

goodsgoodsQuantitative Quantitative informationinformation Share capital Share capital and loansand loans

DepreciationDepreciation Dues from Dues from directors, directors, other officers, other officers, companies under same managementcompanies under same management



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TDSTDS


Sources from which bonus shares are issued Required Not requiredDisclosure of utilisation of securities premium amount Required Not required







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TDSTDS


Break up of turnover quantities and amounts in respect of each class of goods

Required Not required







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TDSTDS


Bifurcation between income from trade and other investments








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TDSTDS


Disclosure of TDS in case of gross presentation of income from investments and interest



goodsgoodsQuantitative

Quantitative

informationinformation Share capital Share capital and loansand loans





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TDSTDS


Disclosure in case of manufacturing and trading companies for opening and closing stock of goods produced/tradedgiving break up and quantities




Quantitative






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TDSTDS


Disclosure in case of manufacturing companies for quantitative information on licensed/installed capacity and actual production




Quantitative






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TDSTDS


Disclosure of amount reserved for repayment of loans and share capital




Quantitative

informationinformation Share

capital

Share

capital

and loansand loans DepreciationDepreciation Dues

from

Dues

from

directors,

directors,

other

officers,

other

officers,

companies under same managementcompanies under same management




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TDSTDS


In case of non provision of depreciation, disclosure in notes to accounts to the fact that no depreciation has been provided along with quantum of arrears of depreciation calculated as per Section 205(2) of the Companies Act,1956.




Quantitative


capital

Share

capital


from

Dues

from

directors,

directors,

other

officers,

other

officers,


2012 AuthorsA Practical Guide to Revised Schedule VIby Sanjeev Singhal & R. Sankaraiah


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TDSTDS


Disclosure of maximum amount due from directors or other officers during the year


Disclosure of dues from companies under the same management Required Not required



Quantitative


capital

Share

capital


from

Dues

from

directors,

directors,

other

officers,

other

officers,




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disclosures has changed in revised


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Areas where presentation and/or disclosures has changed in revised Schedule VI

Shareholders Funds

Disclosure of shares in

respect of each class in company held by its holding company or its ultimate

For subsidiary companies separate disclosure

of no. of shares held by holding company orby ultimate holding company andsubsidiaries.

Separate disclosure required for each class of share capital.Further the clause: the auditor is not required to certifycorrectness of such shareholdings as certified by

o ng company nc u ng shares held by their subsidiaries or associates of holding company

The auditor is not required to certifycorrectness of such shareholdings as certifiedby the management.

management has been removed.

For each class of shares, following disclosures are required

Disclosure regarding shares allotted for consideration other than cash, bonus shares and shares bought

Requires disclosure of shares allotted for consideration other than cash and bonus shares but not for shares bought back. Further, disclosure needs to be made

or perio o 5 years imme iate y prece ing t e ate atwhich the B/S is prepared:

Aggregate no. and class of shares allotted as fully paidup pursuant to contract(s) without payment beingreceived in cash.

back without there being a cap of 5 years Aggregate no. and class of shares allotted as fully paidup by way of bonus shares.

Aggregate no. and class of shares bought back.

Debit balance of profit and Shown as a deduction from uncommitted Debit balance of P/L A/c shown as a negative figure under


loss account reserves. negative.


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Current Long term

Miscellaneous Misc. expenses

liabilities

advancesexpenses

or adjusted)

Item Old Schedule VI Revised Schedule VIInterest accrued & due on

borrowings

Disclosed as part of secured /unsecured

loans as

the

case

may

be

Disclosed as current liabilities



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Current Long term


liabilities

advancesexpenses

or adjusted)


Gross and net blockRequires disclosure of gross as well as net

block

Disclosure of only net block is required



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Current Long term


liabilities

advancesexpenses

or adjusted)


Capital advancesThe practice is to club it with capital work

in progress

To be shown separately under the head Long term loans andadvances



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Current Long term Miscellaneous Misc. expenses

liabilities

advancesexpenses

or adjusted)


Criteria for separate disclosure

Separate disclosure required for any item of expenditure which exceeds one per cent of the revenue from o erations or Rs. 5,000

Separate disclosure required for any item of income or

expenditure which exceeds one per cent of the revenue from

whichever is higheroperations or Rs. 1,00,000, w ic ever is ig er



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liabilities

advancesexpenses

or adjusted)

Item Old Schedule VI Revised Schedule VISeparate disclosure in respect

of m iscellaneous expenses Required on the face of balance sheet Not required

off or adjusted)



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liabilities

advancesexpenses

or adjusted)


Recognition of dividends

declared by subsidiaries

Parent company need to recognise dividends declared by subsidiary companies even after the date of balance sheet if the ertain to the

No such requirement. Thus, dividends will have to berecognised as per the requirements of AS 9 which means thatdividends will be reco nised onl when the ri ht to receive

companiesperiod under reporting. dividends is established.



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For any queries write to Dr. Sanjeev Singhal . Email: [email protected]


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330498 1002635 Comparison Between Old and New Schedule Vi