23 July 2013
Pvt ltd company is incorated as on 1-4-12 but not started business operations and incured some expenses.The company is liquidating in same financial year .Please tell me Which Disclosures I have to Make While preparing Balance Sheet As Per Schedule VI.
23 July 2013
I think Revised schedule will be applicable because there is a specific clause for non applicabilty .And as far as my knowledge is concerned there is no restriction on applicablity of revised schedule in this case
23 July 2025
For your Pvt Ltd company incorporated on 1-4-12, which did not start business operations but incurred some expenses and is liquidating in the same financial year, here’s how to handle disclosures as per **Schedule VI (Revised Schedule VI applicable from 1-4-2013)**:
### Key points:
1. **Applicability**: Since the company is incorporated during the year and preparing financials for the same period, **Revised Schedule VI** would apply if the financial year ends on or after 1-4-2013. If it is before, then the old Schedule VI applies.
2. **Expenses**:
* Expenses incurred before commencement of business are generally treated as **preliminary expenses or deferred revenue expenditure**. * They can either be **capitalized as an intangible asset** or shown under **“Miscellaneous Expenditure” (to the extent not written off)** as per the old schedule. * As per Revised Schedule VI, **there is no separate head for preliminary expenses**; such expenses are either capitalized as an asset or written off to P\&L.
3. **P\&L Account**:
* Since no business operations started, **there may be no trading or revenue income**. * If the expenses are written off, they appear in the P\&L as “Other Expenses.” * If capitalized, the expense will be shown as an asset in the balance sheet.
4. **Disclosures in Balance Sheet as per Schedule VI**:
* **Capital Work in Progress** or **Intangible Assets** (if expenses are capitalized). * If expenses are written off, **Profit & Loss account will show net loss**. * Under “Notes on Accounts,” disclose nature and treatment of such expenses. * Show **Current Liabilities and Provisions** if any. * Since company is liquidating, disclose the **liquidation status** in notes to accounts.
### Summary of disclosures:
| Particulars | Treatment/Disclosure | | --------------------------------------- | ----------------------------------------- | | Preliminary/Startup expenses | Capitalize as asset or write off in P\&L | | No business revenue | Show loss in P\&L if expenses written off | | Liquidation status | Disclose in notes to accounts | | Fixed Assets / Capital Work in Progress | Show if expenses capitalized | | Current Liabilities | Show separately | | Share Capital | Show as per subscription |
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If you want, I can help you draft the exact **Balance Sheet format** and **Notes to Accounts** for this scenario based on Schedule VI!
CAclubindia
