CA Final audit paper!! caro and schedule vi!!!

CARO IS APPLICABLE TO FOREIGN COMPANY AND ITS SUBSIDIRIES IN INDIA,

PROVISION IS REQUIRED AS CURRENT LIABILITIES. ONE SHOULD WRITE MEANING OF "CL" To justify the provision for proposed dividend.

According to me, CARO is not applicable based on the assumption it doesn't me the criteria as stated in CARO 2003

Provision for dividend required as there is contradiction between AS & Revised schedule VI. Thus AS will overide the requirement  of Schedule VI.

Those who are having Financial Reporting book of M P vijay kumar can confirm the P D provision on page no 959

Am reproducing text here.

"The following shall be disclosed separately:

a The amount of dividends for the period proposed to be distributed to equity and preference shareholders and the related amount per share
b Arrears of fixed cumulative dividends on perference shares
Therefore, schedule VI requires a mere disclosure of proposed dividend in the notes and doesn't require it to be treated as adjusting event (in the financial statements).

However, currently AS requires proposed dividend to be adjusted in the accounts and as Accounting standards override the requirement of schedule VI, proposed dividend should be treated as a provision, unless AS 4 is revised in this respect."

 

I think today also easy one

what  is the answer for question 1 part 4 " revenue recognition.... nd btw caro not applicable.. since three conditions are satisified.. that is waht given in d question..

what is the answer for question 1 part 4" revenue recognition... i have WRONGLY RETURN ON  AS1 " ACRUAL BASIS OF ACCOUNTING"..

was average paper today,if u r just watching the question and have not written the exam it will look easy.

CARO applicable

and AS will prevail over Sch. VI, so provision required

 Whether spouses 'sister's' husband falls in the defination of relatives?

No, Not fall under definition of relatives

The definitino of relative is being changed in the CA Act. Accordingly the definitin of relative should be as per AS-18.  So spouses sisters husband will be closely related to the auditor.