Schedule vi

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Radhe Agrawal (Querist)
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12 March 2010 Why show "Estimated amount of contracts remaining to be excuted on capital account & not Provided for" in the head of Contingent Liability in Schedule vi of company Act 1956.

CA Shishir

CA Shishir (Expert)
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12 March 2010 because the Act says so. We cannot detain from the format. If we are not following, a note in the notes to account or qualification by the auditor will do. Ultimately, its matter of compliance

Madhusudan Bohra

Madhusudan Bohra (Expert)
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14 March 2010 ????????

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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23 July 2025 The reason **"Estimated amount of contracts remaining to be executed on capital account & not provided for"** is shown under **Contingent Liabilities** in **Schedule VI (Companies Act, 1956)** is purely because the law mandates it.

### Explanation:

* **Legal Requirement:** Schedule VI prescribes a specific format for financial statements, including what must be disclosed under Contingent Liabilities.
* This item represents **commitments** that the company has made for capital expenditures, but which have not yet been recognized as liabilities because the services or goods have not been received.
* Since the company **is committed to spend but the liability has not crystallized**, it is considered a **contingent liability**.
* **Disclosure ensures transparency** so that users of financial statements know about the company's future obligations related to capital projects.

### If you don’t disclose:

* It is **non-compliance** with Schedule VI.
* The **auditor may qualify** the audit report.
* You may be asked to **add a note in the financial statements** explaining the omission.

### In short:

It is a **mandatory disclosure** under Schedule VI to inform stakeholders about pending capital commitments that could affect the company’s future cash flows.

If you want, I can help you with **how to present this in the notes to accounts** or give sample wording!

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