Where do we disclose the Remuneration paid to Directors in revised schedule VI ? Should the same be classified SEPARATELY under Salaries (Employee Benefits Expense)?
Another query I have is Whether remuneration paid to directors is liable to be shown in related party transactions disclosure as per AS 18 ?
02 September 2013
Thank you for your reply, So is there any provision to disclose remuneration paid to directors separately under Salaries or should it be clubbed with other salaries(as paid to other employees of the co)
04 September 2013
Dear vaibhav . . You cannot include Director remuneration in employee benifit expences . . it has to be shown under "Other expences" disclosing as "Director remunerations"
At the same time If this Director remuneration exceeds one percent of the Revenue from operations or Rs.100000, which ever is higher,needs to be disclosed seperately on the face of Statement of profit and loss
Thank you for your reply. But relying on which provisions can we conclude that remuneration should be included in "Other Expenses" ? In my opinion it has been a significant change in revised Sch VI that MCA has not anywhere specified to show Managerial Remuneration separately. . . The 2nd thing is is any expense exceeds the limits(as in ur reply) it should be disclosed under "Other Expenses" only creating a separate head, but there is no provision which requires to show the same on the Face of P & L.
So could you please support your answers with statutory provisions or guidance notes etc.
04 September 2013
2)Kindly refer to Note no.4.3.3 in ICAI Guidence note on Revised Schedule VI
1)Directors remuneration is not employee cost to company and not possible to club in other heads in revised schedule VI,, hence it can be disclosed under other expences,,however if above said conditions satisfied it need to be disclosed under face of statement of profit and loss instead going to other expences
Thanks for your reply. So our discussion has now been divided in two parts. 1.) Should the remuneration be included in Salaries in revised Sch Vi 2.) If we treat it as other expense how would be the further treatment.
So on the first point(above) the views are now divided as you see expert "Tushar" has said it should be included in Salaries. So I'm in a dilemma which one to follow ? For the second point my views are: The para you referred refers us to clubbing pattern of expenses and it doesn't state that the expenses crossing the limits therein should be disclosed on the face of Statement of Profit & Loss. Please consider the 2nd line of 2nd para of note 9.5.7 which says that "Which also be classified under "other expenses". Here I'm not saying that we cannot show the remuneration on the face, moreover I'm saying that the para you referred doesn't say that.
05 September 2013
1)No,,director remuneration is not employee cost to company and hence it cannot be clubbed with employee cost.
2)if conditions laid in 9.5.7 as said by you satisfied it should be disclosed seperately and in my opinion it should be disclosed in face of statement of profit and loss(we have done the same for financials of 1000 crore company)
3)tushar suggestion may be incorrect or he should tell us on what ground we can treat it as employee cost
4)para refered by me is same as said by 9.5.7,,you can go with this i agree with 9.5.7
5)so Go accordingly,,better you consult your boss/auditor in this regard to get a confirmed and reliable opinion,,it may change
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