Presented by:Harsh Sankhala (62) Lohit Sharma (105)Kevin Coelho (107) Aditya Chavan (65) Sachin Shetty (92) Aniket Metkar (109)Vivek Vinodraj (98) Munesh Sharma (119)Antariksh Gehalot (104)

Revised Schedule VI

IntroductionSchedule VI of the Companies Act, 1956, prescribes

the format of financial statements and disclosure requirements for corporate entities in India.

Considering the economic and regulatory changes that have taken place globally, and being as old as the Act itself (1956), schedule VI had completely outlived its utility.

As per notification dated 28th March, 2011 by Ministry of Corporate Affairs the revised Schedule VI is applicable to balance sheet & profit & loss account to be prepared for the financial year commencing on or from 01st April 2011.

Objectives

One of the Main aim of revising schedule VI was to attain compatibility and convergence with IFRS in IndiaIn may 2008, MCA issued a press release in

which it has committed to convergence with IFRS by April 1, 2011

At the G20 summit on financial Market and World Economy, then Finance Minister also committed to have convergence with IFRS in India

Other main object of revising schedule VI was to eliminate numerous statistical and disclosure requirements which are not relevant from an investor perspective.

Compliance with the Act and/or Accounting Standards:

Requirements of the Act and/or Standards will override the related requirement of Schedule VI.

General instructions

Disclosures are required by the Companies Act shall be made in the notes to accounts

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 Financial Statements.

Notes to the accounts shall contain information in addition to that presented in the Financial Statement and shall provide where required

(a) narrative descriptions or disaggregations of

the items recognized in those statements and

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

General instructions

Each item on the face of the Balance sheet and statement of the profit and loss shall be cross- referenced to any related information in the notes to the accounts

Figures of previous period:– The corresponding amounts (comparatives) for the

immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given.

General instructions

Presentation of figures:– Where Turnover:

o < Rs. 100 crores = Figures to be in nearest hundreds, thousands, lakhs or millions or decimals thereof.

o > Rs. 100 crores = Figures to be in nearest lakhs or millions or decimals thereof.

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

General instructions

Comparison between Old & Revised Schedule VISr. No.

Particulars Old Schedule VI Revised Schedule VI

1) Form of Balance Sheet

Both horizontal and vertical form were

allowed

Only vertical form of Balance Sheet has

been specified in the revised Schedule VI

2) Form of Profit and Loss Account

No format specified for Profit and Loss

Account

Form of Profit and Loss Account

specified under Part II3) Profit and Loss

Appropriation Account

Opening surplus, proposed dividend

and transfer to/ from reserves were shown

in Profit and Loss Appropriation

Account

Transfer from/ to reserves to be shown

under the heading Reserves & Surplus

only. No requirement of separate Profit and

Loss Appropriation Account.

Sr. No.

Particulars Old Schedule VI Revised Schedule VI

4) Net Working Capital

Current assets & Liabilities are shown

together under application of funds.

The net working capital appears on

balance sheet.

Assets & Liabilities are to be bifurcated into current & Non-

current & to be shown separately.

Hence, net working capital will not be appearing in B/S.

5) Fixed Assets There was no bifurcation required

in to tangible & intangible assets.Capital advances used to be shown under the Head Capital Work in

Progress under Fixed Assets

Fixed assets to be shown under non-current assets and

have to be bifurcated into Tangible &

intangible assets.Capital advances to be shown under the

head ‘Long term Loans & Advances’

Comparison… (iii)

Sr. No.

Particulars Old Schedule VI Revised Schedule VI

6) Borrowings 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 7) Deposits Lease deposits are

part of loans & advances

Lease deposits to be disclosed as long term

loans & advances under the head non-current

assets

Comparison… (iv)

Sr. No.

Particulars

Old Schedule VI Revised Schedule VI

8) Investments

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.9) Loans &

AdvancesLoans & Advance

are disclosed along with current assets Loans & Advance to subsidiaries &

others to be disclosed

separately.

Loans & Advances to be broken up in long term &

short term and to be disclosed under non-

current & current assets respectively.

Loans & Advance from related parties & others to be disclosed separately.

10) Deferred Tax

Assets / Liabilities

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.

Comparison… (v)

Sr. No.

Particulars

Old Schedule VI Revised Schedule VI

11) Cash & Bank

Balances

Bank balance to be bifurcated in

scheduled banks & others

No such bifurcation required. Bank balances in

relation to earmarked balances, held as margin

money against borrowings, deposits with more than 12 months maturity, each of

these to be shown separately.

12) Profit & Loss

(Debit Balance)

P&L debit balance to be separately disclosed in the Balance Sheet.

Debit balance of Profit and Loss Account to be shown as negative figure under

the head Surplus. Therefore, Reserve & Surplus can have a negative balance.

Comparison… (vi)

Sr. No.

Particulars

Old Schedule VI Revised Schedule VI

13) Sundry Debtors

Debtors outstanding for more than six months from

invoice date to be shown separately

Debtors outstanding for more than six months from the date they became due

to be shown separately

14) Other current

liabilities

No specific mention for separate disclosure of

Current maturities of long term debt

No specific mention for separate disclosure of

Current maturities of finance lease

obligation

Current maturities of long term debt to be disclosed

under other current liabilities.

Current maturities of finance lease obligation to

be disclosed.

Comparison… (vii)

Sr. No.

Particulars

Old Schedule VI Revised Schedule VI

15) Separate line item Disclosure

criteria

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

16) Expense classificati

on

Function wise & nature wise

Expenses in Statement of Profit and Loss to be

classified based on nature of expenses

17) Finance Cost

Finance cost to be classified in fixed

loans & other loans

Finance cost shall be classified as interest

expense, other borrowing costs & Gain / Loss on

foreign currency transaction & translation

Comparison… (viii)

Sr. No.

Particulars

Old Schedule VI Revised Schedule VI

18) Foreign exchange gain / loss

Gain / Loss on foreign currency transaction to be

shown under finance cost

Gain / Loss on foreign currency transaction to be

separated into finance costs and other expenses

19) Purchases The purchase made and the opening &

closing stock, giving break up in

respect of each class of goods

traded in by the company and indicating the

quantities thereof.

Goods traded in by the company to be disclosed in

broad heads in notes. Disclosure of quantitative details of goods is diluted.

Goods-in-transit to be separately disclosed.

Comparison… (ix)

Sr. No.

Particulars

Old Schedule VI Revised Schedule VI

20) TDS amount on Interest, royalty

received

TDS amount was required to be

shown for Interest income etc.

No requirement of disclosing TDS amounts

separately

21) Managerial Remunerat

ion and Commissio

n

Payment to directors and

detailed calculation under section 198 was required to be

disclosed

No disclosure requirements for Managerial Remuneration

22) ESOP expenses

No requirement to show separately as part of Employee Benefits expense

Expense on Employee Stock Option Scheme (ESOP) and Employee

Stock Purchase Plan (ESPP) to be shown separately as part of Employee Benefits

expense

Comparison… (x)

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