CA Loan Bajaj Finserv
CA Final Online Classes
CA Classes

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Specific Issues in Revised Schedule VI

CA Sourabh Agarwal 
on 26 September 2012

LinkedIn


Financial year 2011-12 has elapsed and nearly all companies have prepared there financial statements in accordance with revised Schedule VI. With every change, lots of clarifications and guidance material is made available to stakeholders, however, with due regard to infinite nature of accounting transactions and events, all such aspects cannot be dealt with at inception.

General Instructions to revised schedule VI provides flexibility to add, delete, amend or substitute any head/sub-head in order to comply with the requirements of the Companies Act, 1956 or accounting standards notified for companies. It is advisable, however, to incorporate any change in notes to accounts rather than on face of balance sheet or statement of profit or loss. This should be done in order to achieve the objective of better presentation and comparability of financial statements.

Although Guidance Note issued by ICAI in this regard is very detailed, I am discussing hereunder some matters regarding presentation of residual category.

Other long term liabilities and Other Current liabilities

Revised Schedule VI classifies “Other long term liabilities” in two categories, viz. “Trade payable” and “Other”. In case of “Other current liabilities”, a residual sub-head namely, “Other Payables” is prescribed. It also requires specifying nature of items presented in “Other”.

Some accounts which regularly appear in business transactions and are not specifically included in any other head/sub-head making it necessary to be disclosed in residual category are discussed in this write up. These should be disclosed in notes to accounts rather that at face of balance sheet.

Some of the issues which can be fitted under “Others” category can be:

1. Liability for expenses

Generally business entities incurs liability for many expenses which are payable after reporting date. Such payables, however, do not find any specific place in the format prescribed in Schedule VI.

2. Liability for dues payable in respect of purchase of fixed asset.

3. Statutory dues payable

There are many types of statutory dues like TDS, VAT, Service Tax, etc. which remains unpaid on balance sheet date. Such dues cannot be termed as Liability for expenses. Hence we can add another Sub-Head under “Other Liabilities” for detailing out all such payables. 

Another benefit of specifically disclosing such dues in separate sub – head is its use in Clause (ix) of para 4 of Companies (Auditor’s report) Order, 2003, whereby the auditor is required to report on delay in payment of undisputed statutory dues as on balance sheet date.

4. Advances from customers

Company normally receives advances from its trade customers. It is advisable to disclose such advances under separate sub-head so that a reader may get detailed information of other payables.

"Being Chartered" Campaign

Delivering Value to the Profession

Email: beingchartered@gmail.com




Category Accounts
Other Articles by -
CA Sourabh Agarwal 

Report Abuse

LinkedIn



Comments


update

X

Do you have any Tax Queries

Submit