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Ministry of Corporate Affairs has made certain changes in the financial reporting framework prescribed under Division I of Schedule III of the Companies Act, 2013 via a notification dated March 24, 2021. These changes are applicable with effect from April 1, 2021.

IGAAP Reporting Framework

Presentation Related changes

Changes in IGAAP Reporting Framework by MCA w.e.f 1st April 2021

1. Change in nomenclature of Tangible Assets

Before Amendment

After Amendment

II. Assets

Non-Current Assets

(1) (a) Property, Plant and Equipment

  1. Tangible Assets
  2. Intangible Assets

II. Assets

Non-Current Assets

  1. (a) Property, Plant and Equipment and Intangible assets
  1. Property, Plant and Equipment
  2. Intangible assets

2. Current maturities of long-term borrowings

Before Amendment

After Amendment

Other current liabilities

Short- term borrowings

Changes in IGAAP Reporting Framework by MCA w.e.f 1st April 2021

3. Reconciliation of Property, Plant and Equipment and Intangible Assets

Before Amendment

After Amendment

A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing:

  • Additions,
  • Disposals,
  • Acquisitions through business combinations,
  • Other adjustments &
  • the related depreciation and impairment losses/reversals shall be disclosed separately.

A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing:

  • Additions,
  • Disposals,
  • Acquisitions through business combinations,
  • amount of change due to revaluation (if change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment /Intangible assets)
  • Other adjustments &
  • the related depreciation and impairment losses/reversals shall be disclosed separately.

Where the Company has revalued its Property, Plant and Equipment, the company shall disclose as to whether the revaluation is based on the valuation by a registered valuer as defined under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017

 

4. Security Deposits

Before Amendment

After Amendment

Long-term loans and advances

Other non-current assets

5. Grant of Donations

Received by section 8 Company shall be disclosed separately under Revenue from Operations.

 

Additional Disclosure

1. Ageing of Trade Payable

Particulars

Outstanding for following periods from due date of payment

Total

Less then 1 year

1-2 Years

2-3 Year

More than 3 years

 

(i) MSME

         

(ii) Others

         

(iii) Disputed dues MSME

         

(iv) Disputed dues Others

         
 

*Where due date of payment is not specified, in that case disclosure shall be made from the date of the transaction.

** Unbilled dues shall be disclosed separately.

2. Ageing of Trade Receivable

Particulars

Outstanding for following periods from due date of payment

Total

Less then 6 months

6 month - 1 Year

1-2 Years

2-3 Year

More than 3 years

(i) Undisputed Trade receivable considered Good

           

(ii) Undisputed Trade receivable considered doubtful

           

(iii) Disputed Trade receivables considered Good

           

(iv) Disputed Trade receivable considered doubtful

           
 

*Where due date of payment is not specified, in that case disclosure shall be made from the date of the transaction.

** Unbilled dues shall be disclosed separately.

3. Shareholding of Promoters

Share holders by promoters at the end of the year

% change during the year

S. No.

Promoter Name*

No. of Shares**

% of total shares***

Total

     

*Promoter here means promoter as defined in the Companies Act, 2013.

** Details shall be given separately for each class of shares

*** percentage change shall be computed with respect to the number at the beginning of the year or if issued during the year for the first time then with respect to the date of issue.

4. Utilization of Borrowings

Where the company has not used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date, the company shall disclose the details of where they have been used.

5. Title Deeds of immovable property not held in the name of the company

Relevant line item in the Balance sheet

Description of item of property

Gross carrying value

Title deeds held in the name of

Whether title deed holder is a promoter, director or relative# of promoter/director or employee of promoter/director

Property held since which date

Reason for not being held in the name of the company**

Property, Plant and Equipment

Land

       

** also indicate if in dispute

Building

         

Investment property

Land

         

Building

         

PPE retired from active use and held for disposal

Land

         

Building

         

Others

           

6. Loans granted to promoters/directors/KMPs and the related parties

Details regarding Loans or Advances in the nature of loans that are granted to promoters, directors, KMPs and the related parties either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment, shall be given in following format:

Type of Borrowers

Amount of loan or advance in the nature of loan outstanding

Percentage to the total
Loans and Advances
in the nature of loans

Promoters

   

Directors

   

KMPs

   

Related Parties

   

7. Ageing and Completion Schedule for CWIP and Intangible assets under development

Ageing Schedule

         

CWIP/Intangible assets under development

Amount of CWIP for a period of

Total

Less than 1 year

1-2 years

2-3 years

More than 3 years

Projects in progress

         

Projects temporarily suspended

         

Project completion schedule

CWIP/Intangible assets under development

Amount of CWIP for a period of

Less than 1 year

1-2 years

2-3 years

More then 3 years

Project 1

       

Project 2

       

8. Details of Benami Property held

Where any proceedings have been initiated or pending against the company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder, the company shall disclose the following:-

(a) Details of such property, including year of acquisition,
(b) Amount thereof,
(c) Details of Beneficiaries,
(d) If property is in the books, then reference to the item in the Balance Sheet,
(e) If property is not in the books, then the fact shall be stated with reasons,
(f) Where there are proceedings against the company under this law as an a better of the transaction or as the transferor then the details shall be provided,
(g) Nature of proceedings, status of same and company’s view on same.

9. Borrowing related Compliance

Where the Company has borrowings from banks or financial institutions on the basis of security of current assets, it shall disclose whether quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts. if not, summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed.

Further, where a company is a declared wilful defaulter by any bank or financial Institution or other lender, following details shall be given:

(a) Date of declaration as wilful defaulter,

(b) Details of defaults (amount and nature of defaults),

“wilful defaulter” here means a person or an issuer who or which is categorized as a willful defaulter by any bank or financial institution (as defined under the Act) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

10. Relationship with Struck Off Companies

Where the company has any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, the Company shall disclose the following details:-

Name of the Struck off Company

Nature of transactions with struck-off Company

Balance outstanding

Relationship with
the Struck off company,
if any, to be disclosed

 

Investments in securities

   
 

Receivables

   
 

Payables

   
 

Shares held by stuck off company

   
 

Other outstanding balances (to be specified)

   

11. Financial Ratios

(a) Current Ratio,
(b) Debt-Equity Ratio,
(c) Debt Service Coverage Ratio,
(d) Return on Equity Ratio,
(e) Inventory turnover ratio,
(f) Trade Receivables turnover ratio,
(g) Trade payables turnover ratio,
(h) Net capital turnover ratio,
(i) Net profit ratio,
(j) Return on Capital employed,
(k) Return on investment.

The company shall explain the items included in numerator and denominator for computing the above ratios. Further explanation shall be provided for any change in the ratio by more than 25% as compared to the preceding year.

12. Companies Act related compliances

  • Registration and Satisfaction of charge:  Where any charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period, details and reasons thereof shall be disclosed.
  • Investment layers: Where the company has not complied with the investment upto maximum number of layers, the name and CIN of the companies beyond the specified layers and the relationship extent of holding of the company in such downstream companies shall be disclosed.
  • Scheme of arrangements: Where any Scheme of Arrangements has been approved by the Competent Authority, the Company shall disclose that the effect of such Scheme of Arrangements have been accounted for in the books of account of the Company in accordance with the Scheme and in accordance with accounting standards and deviation in this regard shall be explained.

13. Undisclosed Income

The Company shall give details of any transaction not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961 unless there is immunity for disclosure under any scheme and also shall state whether the previously unrecorded income and related assets have been properly recorded in the books of account during the year.

14. Corporate Social Responsibility (CSR)

Where the company is covered under section 135 of the companies act, the following shall be disclosed with regard to CSR activities

(a) amount required to be spent by the company during the year,
(b) amount of expenditure incurred
(c) shortfall at the end of the year,
(d) total of previous years shortfall
(e) reason for shortfall,
(f) nature of CSR activities
(g) details of related party transactions e g contribution to a trust controlled by the company in relation to CSR expenditure as per relevant Accounting Standard,
(h) where a provision is made with respect to a liability incurred by entering into a contractual obligation, the movements in the provision during the year should be shown separately.

15. Crypto Currency or Virtual Currency

Where the Company has traded or invested in Crypto currency or Virtual Currency during the financial year, the following shall be disclosed:

(a) profit or loss on transactions involving Crypto currency or Virtual Currency

(b) amount of currency held as at the reporting date,

(c) deposits or advances from any person for the purpose of trading or investing in Crypto Currency/virtual currency


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Category Corporate Law, Other Articles by - Mehul Gada 



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