Hello everyone. All of you are aware about the fact that Revised Schedule VI has been made applicable in ICAI exams from November 2012. So I have tried to make a synopsis of the facts that must be retain in mind while preparing the Financial statements in the exams.
1. Vertical format only to be followed. Following changes have been brought to the main headings:-
|
Old Schedule VI |
Revised Schedule VI |
|
Sources of Funds |
Equity and Liabilities |
|
Application of Funds |
Assets |
2. Name of Sundry Debtors has been changed to ‘Trade Receivables’ and of Sundry Creditors to ‘Trade Payables’.
3. Earlier Debit balance of Profit and Loss A/c was required to be shown as asset under the head ‘Miscellaneous Expenditure’ but now it is to be shown on Equity and Liability side as ‘Reserves and Surplus’ only even if it carries negative fig.
4. Name of the Profit and Loss Account has been changed to ‘Statement of Profit of Loss;.
5. If an asset or Liability can be bifurcated into current and Non-Current Portion then it is to be segregated.
Example:
A. Loan of Rs.10,00,000/- was taken on 01.04.10 from a financial institution. As per the agreed terms and conditions the loan is repayable in 5 equal instalment of Rs.2,00,000/- each starting from 01.04.13.
B. If we are preparing Balance Sheet as on 31.03.13 then it is clear that Rs.2,00,000/- would be paid off upto 31.03.14 i.e. within 1 year from the balance sheet date.
C. In such a case Loan is to be divided into 2 portions:-
· Current-Rs.200000/-
· Non-Current-Rs.800000/-
D. Presentation in Balance Sheet
|
Equity and Liabilities |
Amount |
|
1. Shareholder’s Fund 2. Non-Current Liabilities Long-term loan taken from a financial institution. 3. Current Liabilities Current maturities of Long-term loan taken from a financial institution. |
xxxx 8,00,000 2,00,000 |
6. Presentation of DTA,DTL, Minority Interest and Cost of Control
· Deferred tax Asset: Non-Current Asset
· Deferred tax liability: Non-Current Liability
· Minority Interest: Between Shareholders’ Fund and Non
· Current Liability as a separate line item Cost of Control:
(i) If Goodwill emerged –Non-Current Asset-
· Intangible Asset
(ii) If Capital Reserve-Reserves and Surplus
|
Particulars |
Note No. |
Figure at the end of Current Reporting Period |
Figure at the end of Previous Reporting Period |
|
Equity and Liabilities 1.Shareholder’s Fund Share Capital Reserves and Surplus 2. Minority Interest (Working note no.xxxx) 3. Non-Current Liabilities a. Deferred tax Liability 4.Current liabilities |
1 2 |
xxxxxx xxxxxx |
xxxxxx xxxxxx |
|
Assets 1. Non-Current Assets a. Deferred tax Asset b. Intangible Asset 2. Current Assets. |
2 3 4 |
xxxxxx xxxxxx |
xxxxxx xxxxxx |
Note No. 1
Reserves and Surplus
a) Capital Reserve (Working Note.-xxxx) xxxxx
b) Any other Reserve xxxxx
Total xxxxx
Note No.2
Deferred Tax Liability/Asset (Working Note-xxxx) xxxxx
Note No. 3 Intangible Assets
Goodwill (Working Note-xxxxx) xxxxx
As you can see from the above presentation that Reserves and Surplus has been cross referenced with Note No.1 and in the notes various types of reserves are mentioned with the amount the computation of which is to be presented in working notes. In this way other heads of assets and liabilities to be presented.
This is the basic phenomenon of preparing the financial statements. In the exams at first prepare the working notes then Notes to Accounts and at last Balance Sheet and Statement of Profit and Loss Account.
While giving reply to the questions of Accounting Standards don’t use the word Profit and Loss A/c. Instead use the word ‘Statement of Profit and Loss’. Like in AS-22 the answer should be written as:
“An amount of Rs.xxxxxx would be debited to “Statement of Profit and Loss”.
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