This is to bring to the attention of students that the Revised Schedule VI to the Companies Act, 1956 issued by the Ministry of Corporate Affairs on 28th February, 2011 pertaining to the preparation of Balance Sheet and Profit and Loss Account under the Companies Act, 1956 for the financial year commencing on or after 1.4.2011 shall be applicable for the PCC, IPCC and Final examinations to be held in Nov 2012 and onwards.
Contents of Revised Schedule VI
1. General Instructions for preparation of Balance Sheet and Statement of Profit and Loss of a company.
2. Form of Balance Sheet (only vertical format) with General Instructions for preparation of Balance Sheet (PART-I). The privilege of having a balance sheet under horizontal or vertical format has been done away with. Option of only one format i.e. vertical format is now available for preparation of the Balance Sheet.
3. Form of Statement of Profit and Loss with General Instructions for preparation of Statement of Profit and Loss. (PART-II).
4. The general format does not apply to Insurance Companies, Banking Companies, Electricity Companies or any other company governed by a separate Act, where a form has been specified under that Act.
1. The Revised Schedule VI has eliminated the concept of ‘schedule’ and such information is now to be furnished in the notes to accounts.
2. Proposed Dividend: Part I of Revised Schedule VI does not require the provision for proposed dividend to be made and only desires disclosure of same in notes to accounts. Although Revised Schedule VI does not require provision for proposed dividend, however, the accounting Standards have an overriding effect over Revised Schedule VI and accordingly companies will have to account for the same until revision to this effect is made in AS 4.
3. Share capital: Shareholder holding more than 5% shares specifying the number of shares held, etc.
4. Long Term Borrowing: Shall be stated in descending order of maturity or conversion. Further period and amount of continuing default as on balance sheet date in repayment of loans and interest also needs to be disclosed.
5. Trade receivables: The term sundry debtor has been replaced with trade receivables.
6. Cash and cash equivalents: Bank deposits with more than 12 months maturity to be disclosed separately. The bifurcation of bank deposits among scheduled and non scheduled banks has been dispensed with.
7. Contingent liabilities and Commitments: These were required to be disclosed as footnote to Balance Sheet under old Schedule VI and are now required to be disclosed in notes to accounts.
8. Income or expenditure exceeding 1% of the revenue from operations or ` 1,00,000 whichever is higher, need to be disclosed by way of notes.
9. The limits of rounding off (on the basis of turnover) are as follows
Less than 100 Crores
To the nearest hundreds, thousands, lakhs or millons, or decimals thereof
More than 100 Crores
To the nearest lakhs, millions or crores, or decimals therof.
10. An asset shall be classified as current when it satisfies any of the following criteria:
(a) It is expected to be realized within twelve months after the reporting date; or
(b) Used to settle a liability for at least twelve months after the reporting date.
11. A liability shall be classified as current when it is due to be settled within twelve months after the reporting date;
12. Reserves & Surplus: The balance of ‘Reserves and Surplus’ after adjusting negative balance of surplus (profit & loss account), if any, shall be shown under the head ‘Reserves and Surplus’ even if the resulting figure is in the negative. Earlier, any debit balance in Profit and Loss Account was required to be shown as the last item on the asset side of the Balance Sheet.
13. The Old Schedule VI required separate presentation of debtors outstanding for a period exceeding 6 months based on date on which the bill/invoice was raised whereas, the Revised Schedule VI requires separate disclosure of “trade receivables outstanding for a period exceeding six months from the date the bill/invoice is due for payment.”
14. The name has been changed to “Statement of Profit and Loss” as against ‘Profit and Loss Account’ as contained in the Old Schedule VI.
To view classes of Revised Schedule VI by CA Raj K Agrawal Click here