Rev Sch VI

7/30/2019 Rev Sch VI

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Welcome to Presentation

on preparation offinancial statements under

revised schedule VIK.Chandra SekharCompany SecretaryAce Designers Limited, Bangalore

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Relevant provisions

Indian Companies Act, 1956Rules

Notifications

Circulars

Accounting Standards

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Highlights of revised schedule VIOnly Vertical Format of BS & PL is permitted

Format for P & L account is introduced

Concept of operating cycle is introduced major shift

Clarity on rounding of the figures

Revised schedule VI is inline with IFRS

Companies act, Rules and accounting standards prevail overschedule VI - conflict avoided

Uniform presentation of UOMRequirements of Part IV is dispensed with

Qty details need not be reported

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Highlights of revised schedule VISchedule VI disclosure requirements are minimum disclosures

Schedule VI are in addition to but not substitution thereof

Applicable for companies commencing f.y on or after 1.4.2011

Early adoption is not permitted

Comparative figures need to be given for the period ending2011-12

Terms imported from accounting standards.

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BALANCE SHEET FORMAT

HIGHLIGHTS

Separate heading for the following items:

(a) Money received against share warrants (b) Intangible Assets

(c) Intangible Assets under development

(d) Cash and Cash Equivalents (e) Share Application Money pendingAllotment

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Balance Sheet format

EQUITY & LIABILITIESA. Shareholders Funds1. Share Capital

2. Reserves and Surplus3. Money received against share warrants4. Share Application Money pending Allotment

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B. Non-current Liabilities1. Long Term Borrowings

2. Deferred Tax Liabilities (Net)

3. Other Long Term Liabilities4. Long Term Provisions

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C. Current Liabilities1. Short Term Borrowings2. Trade payables3. Other Current Liabilities4. Short Term Provisions

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Non-current Liabilities Current Liabilities

1.Long Term

Borrowings2.Deferred Tax

Liabilities (Net)

3.OtherLong Term

Liabilities

4.Long Term

Provisions

1. Short Term

Borrowings2. Trade payables

3. OtherCurrentLiabilities4. Short Term

Provisions

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Balance Sheet formatASSETSA. Non - Current Assets1. Fixed AssetsTangible AssetsIntangible Assets

Capital Works-in-progressIntangible Assets under development

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Balance Sheet formatNon - Current Assets

1. Non-current Investments2. Deferred tax Assets (Net)3. Long Term Loans and Advances

4. Other Non- Current Assets

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Balance Sheet formatB. Current Assets

1. Current Investments2. Inventories3. Trade Receivables4. Cash and Cash Equivalents

5. Short Term Loans and Advances6. Other Current Assets

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Balance Sheet formatCURRENT ASSET

It is expected to be realized in, or is intended forsale or consumption in, or companys normal operatingcycle orHeld primarily for the purpose of being traded orExpected to be realized within 12 months of thereporting date orCash and Cash Equivalents

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Balance Sheet formatCurrent Liability

Expected to be settled in the companys normal operating cycle orHeld for the purpose of being traded or

It is due to be settled within twelve months after the reporting date

Company does not have right to postpone the settlement beyond 12months

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Balance Sheet formatNew concepts

Operating cycle means the time between theacquisition of assets for processing and theirrealization in cash or cash equivalents.

Where the normal operating cycle cannot beidentified, it is assumed to have duration of12 months.

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Balance Sheet Additional Disclosures

1. Share CapitalDetails of Shares held by the Holding Company /Subsidiary CompanyDetails of Shares held by each shareholder holdingmore than 5 % of the shares.

Shares allotted by way of Bonus Shares, withoutcash, shares bought back for a period of 5 years.Details of Convertibility of Equity/PreferenceShares.

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Balance Sheet AdditionalDisclosures2. Reserves and Surplus

Capital Redemption ReserveDebenture Redemption ReserveRevaluation ReserveShares Option outstandingShare premium account

Debit balance in PL account need to be shown in

the liabilities withve value

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Balance Sheet AdditionalDisclosures3. Money received against share warrants need to beshown separately in the BS

4. Share Application Money Pending allotment to beshown separately in BS but no under share capitalschedule

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Balance Sheet AdditionalDisclosuresLong Term Borrowings

Bonds, DebenturesTerm Loans: From Banks and From othersDeferred payment liabilitiesDepositsLoans and advances from related partiesLong term maturities

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Balance Sheet AdditionalDisclosuresBorrowings shall be sub-classified as secured and

unsecuredNature of security shall be specifiedWhere loans are guarantee by directors or others thesame need to be specified

Bonds and debentures, rate of interest and redemptiondate in the descending orderTerms of repayment, period and amount of default shallbe specified

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Balance Sheet AdditionalDisclosuresOTHER LONG TERM LIABILITIES

Trade Payables

Others ( ex: Capex payments)Payables which are due for payment beyond 12 months afterreporting date or operating cycle

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Balance Sheet AdditionalDisclosuresLONG TERM PROVISIONS

Provision for Employee Benefits where it is a noncurrent liability

Others

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Balance Sheet AdditionalDisclosuresCURRENT LIABILITIES

Short term borrowingsRepayable on Demand

From Banks &

From Others

Loans from Related PartiesDeposits

Other Loans and advances

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ComparisonLong term Borrowings Short term Borrowings

1. Bonds, Debentures

2. Term Loans:3. From Banks and4. From others5. Deferred payment

liabilities6. Deposits7. Loans and advances

from related parties8. Long term maturities

1. Loans repayable onDemand

2. From Banks &

3. From Others4. Loans from Related

Parties5. Deposits6. Other Loans and

advances

Difference between Long term and short term borrowing is due date for payment

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Balance Sheet AdditionalDisclosuresBorrowings shall be sub-classified as secured and

unsecuredNature of security shall be specifiedWhere loans are guarantee by directors or othersthe same need to be specified

Bonds and debentures, rate of interest andredemption date in the descending orderTerms of repayment, period and amount of defaultshall be specified- Earlier only in CARO

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Balance Sheet AdditionalDisclosuresTrade Payables

other current liabilitiesCurrent Maturities of Long Term DebtsCurrent Maturities of Lease ObligationsInterest Accrued but not dueInterest Accrued and DueIncome received in advanceUnpaid DividendsShare application money to be refundedOthers

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Balance Sheet AdditionalDisclosuresShort term Provisions

Provision for Employee Benefits

For Others

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Balance Sheet AdditionalDisclosuresAssets- Non Current Assets

Fixed AssetsLandBuildingsPlant and EquipmentFurniture and FixturesVehiclesOffice EquipmentOthersIntangible Fixed Assets

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Balance Sheet AdditionalDisclosuresNon-current InvestmentWhere the investment is expected to be held beyond twelve months after

reporting date.- Shall be classified as Trade and Other investmentsInvestment in PropertiesEquity InstrumentsPreference SharesGovernment or Trust SecuritiesDebentures or Bonds

Mutual FundsPartnership FirmsOthersQuoted or Unquoted, Market Value DiminutionIf investment is in subsidiary companies then details

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Balance Sheet AdditionalDisclosuresLONG TERM LOANS & ADVANCES

Capital AdvancesSecurity DepositsLoans and advance to related partiesOthersTo be sub-classified as (a) Secured & considered Good (b) Unsecured

considered Good and (c) Doubtful

Due by Directors, Relatives to be shown separately

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Balance Sheet AdditionalDisclosuresOTHER NON-CURRENT ASSETS

Long Term Trade ReceivablesOthers

To be sub-classified as (a) Secured & consideredGood (b) Unsecured considered Good and (c)

Doubtful

Due by Directors, Relatives to be shown separately

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Balance Sheet AdditionalDisclosuresCurrent Assets Investments (current investments)

Investment in PropertiesEquity InstrumentsPreference SharesGovernment or Trust SecuritiesDebentures or BondsMutual FundsPartnership FirmsOthers

Quoted or Unquoted Market Value DimunitionIf investment is in subsidiary companies then details

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ComparisonNon-current Investments Current Investments

i. Investment in Properties

ii. Equity Instruments

iii. Preference Shares

iv. Government or Trust

Securities

v. Debentures or Bonds

vi. Mutual Funds

vii. Partnership Firmsviii.Others

i. Equity Instruments

ii. Preference Shares

iii. Government or Trust

Securities

iv. Debentures or Bonds

v. Mutual Funds

vi. Partnership Firms

vii. Others

Difference between current and non current investment is expected date of realisation

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Balance Sheet AdditionalDisclosuresCurrent Assets Inventories

Raw MaterialsWork-in-progressFinished GoodsStores & SparesLoose ToolsOthers

Goods in Transit to be shown as a sub itemMethod of valuation to be stated

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Balance Sheet AdditionalDisclosuresCurrent Assets Trade receivables

Only receivables from sale of goods or servicesSecured, considered good

Unsecured considered good

Doubtful

Receivables outstanding more than six months from the due dateshould be shown separately

Debts due by Directors and other officers should be specified

Allowances for bad and doubtful should be disclosed

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Balance Sheet AdditionalDisclosuresCurrent Assets Cash and Cash equivalentsBalance with Banks

Cheques, Drafts on hand

Cash on hand

Others

Margin money to be disclosed separately.

Deposit with maturity of more than 12 months to be shownseparately.

Difference between AS 3 & Sch VI

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Balance Sheet AdditionalDisclosuresCurrent Assets Short Term loans and advances

Loans and advances to related partiesTo Others

To be sub-classified as (a) Secured & considered Good (b)Unsecured considered Good and (c) Doubtful

Due by Directors, Relatives to be shown separately andprovision for bad and doubtful debts to be shown

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Profit and Loss statement Highlights

Format for P&L Account introduced.Classification of Expenses by nature needs to begivenProfit or Loss from discontinuing operation needsbe shown separately.Quantitative details of Turnover, Raw Materials,Purchases, installed capacity, details of managerialremuneration done away with.

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Profit and Loss statement

INCOME DETAILS

Revenue from operations

Other income

Total Revenue

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Profit and Loss statement

EXPENDITURE DETAILS

Same classification as presentAdditional disclosure in P& L accountExceptional items

Ex: Compensation for earth quake etc.,Extra-ordinary itemsEx: Profit on sale of land & Building etc.,

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Profit and Loss statementREVENUE FROM OPERATIONS

Sale of ProductsSale of ServicesOther operating Revenues

Less : Excise Duty

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Profit and Loss statementOTHER INCOME

Interest Income

Dividend income

Net gain/Loss on sale of investments

Other than above (net of expenses)

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Profit and Loss statementOTHER EXPENSES

Any item of expenditure which is more than 1% of the revenue from operations or Rs.1,00,000/- whichever is higher to be shown

under a separate head.

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Profit and Loss statementOTHER EXPENSES

Any item of expenditure which is more than 1% of the revenue from operations or Rs.1,00,000/- whichever is higher to be shown

under a separate head.

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Profit and Loss statement specialitemsFinance cost should be shown as

Interest expenseOther borrowing costNet gain/loss on forex transactions

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Profit and Loss statementAUDITORS REMUNERATION

To be shown under the following heads :For AuditFor taxation mattersFor Company law mattersFor Management ServicesFor other servicesFor reimbursement of expenses

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DISCLOSURE REQUIREMENTS Pre-V/s Post

Particulars Earlier Now

Source from which bonus shares

issued

Required Not required

Disclosure of Utilization of share

premium account


Break up turnovereach class of

goods


Bifurcation between income from

trade & other investments


Bank Balance with Scheduled and

non-scheduled BanksRequired Not required

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DISCLOSURE REQUIREMENTS

Particulars Earlier Now

Calculation of managerial

remuneration u/s 349


Investments purchased and sold

during the year


Commission paid to brokerage

paid


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DISCLOSURE REQUIREMENTSParticulars Earlier Now

TDS amount disclosures in

case of income


Disclosure of Opening &

closing stocks

quantities


Quantitative information,

Licensed capacity etc.


Disclosure of Dues from

Managerial persons

maximumamount due etc


Disclosure of dues from

Companies under the same

management


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Reconciliation of no. of sharesof each class opening toclosing

Not Required Required for eachclass of shares

Disclosure of Rights,Preferences and restrictions


Disclosure of shares in theCompany held by eachshareholder holding more than5 % shares specifying no. ofshares held


Share Application Money

pending allotment

No Guidance To be shown as a

separate line item

Current and non-currentclassification of liabilities

Not Required Required based onthe timing.

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Reconciliation of no. of sharesof each class opening toclosing


Disclosure of Rights,Preferences and restrictions


Disclosure of shares in theCompany held by eachshareholder holding more than5 % shares specifying no. ofshares held


Share Application Money

pending allotment

No Guidance To be shown as a

separate line item

Current and non-currentclassification of liabilities

Not Required Required based onthe timing.

Other Commitments Not Required Required for51

Open Issues


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Open Issues

Format of cash flow statement is not prescribed

MSMED Disclosure not specified

XBRL taxonomy requires changes in line with

revised schedule XIApplicability for Listed companies Clause 41

Applicability for interim financial statements

-

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Case Laws


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Case Laws

An entity purchased certain items of inventory andexpect to hold it for consumption for a period of 13

months. Whether it is current or non-current, if

Operating cycle of the entity is 14 month

Current Asset

-

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Case Laws


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Case Laws

An entity has raised Rs.10 lacs of Rs.100 8%

debentures in September 2008. As per the terms, 25%of debentures will be redeemed at par after 3 years,

other 25% after 4 years and balance 50% after 5

years. What should be the amount of current liability as

on 31st March 2011?Terms of maturity:

3rd year : 25% - f.y 2011-12

4th year : 25% - f.y on 2012-13

5th year: 50% - f.y 2013-14

Year ending: 31/03/2011

Maturity during f.y. 11-12 (due before 12 months)

25%

Current liability Rs. 2.5 Lakhs

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Case Laws


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Case Laws

Company X has taken a five year loan. The loan

contains certain debt covenants, e.g., filing of quarterlyinformation, failing which the bank can recall the loan

and demand repayment thereof.

The company has not filed such information in theprevious quarter;

Whether the loan is current or non current

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Case Laws


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Case Laws

A company has excess finished goods inventory that it

does not expect to realize within the companysoperating cycle offifteen months. Since such finished

goods inventory is held primarily for the purpose of

being traded, the same should be classified as

Current.

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Case Laws


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Case Laws

A company has sold 10,000 tonnes of steel to its

customer. The sale contract provides for a normalcredit period of three months.The companys

operating cycle is six months. However, the company

does not expect to receive the payment within twelve

months from the reporting date.Therefore, the same should be classified as Non-

Current in the Balance Sheet.

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Case Laws


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Case Laws

Is margin money deposit, a part of current asset?

X Ltd. has taken huge loans from Pink bank and is in

default of repayment. The entity expects to refinance

or roll over the obligation on a long term basis. Hence,

the mgmt. has classified the loan as non-currentliability. Is the treatment proper?

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Case Laws


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Case Laws

Liability toward bonus, etc., payable within one year

from the Balance Sheet date is classified as current.In case ofaccumulated leave outstanding as on the

reporting date, the employees have already earned the

right to avail the leave

To the extent, the employee has unconditional right toavail the leave, the same needs to be classified as

current even though the same is measured as other

long-term employee benefit as per AS-15

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Q & A


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Thank you

Documents

Rev Sch VI