Final accounts statements as per companies act / it act

Dear friend, First thing is that, its not ministry of company affairs, it is a Ministry of Corporate Affairs. Both Ministry of corporate affairs and ministry of finance operates in different field. Both ministries are formed to serve different purposes. MCA is there to regulate investments in India and investors benifit whereas MF is there for collection of revenue. Both ministries regulate there goles by implementation of different laws such as companies act, sebi, incomtax act, excise, customs act etc... As both ministries serving different purposes, there requirements are also different. And therefore there are different formats of Balancesheets. Now the question is of different depreciation rates, I hope you must be knowing, even asset recognition criteria is diffrent under both statute. And method of depreciation is also different. One is following individual asset method where as other is following block of asset method. So for different assets different methods rates are also diffrent. Further rates under companies act are only minimum rate, you can provide for depreciation at higher rate also as per your estimates. Hope you will get satisfactory answer Thank you, Pranit Patil

Convinced :)......but not convinced!!! :(

Sir,

Be regular on CACLUBINDIA.     You may certainly get clarity from the PROFESSIONALS who are ready to share their insights on various important issues, which we may not get from Colleges / Institutes.

Your doubt may appear different for some, but it is natural till we understand it in its own perspective.

CACLUBINDIA is the best forum availalbe now.

Hope, You may be convinced the version given by Mr.Pranit.

 

Ofcourse sir....The "convinced" and "not convinced" remarks represent in different situations.

I mean as an Accounts professional, I am really convinced with the detailed message of Pranit sent to me with due references and I sincerely thanked him for it.

The "not convinced" is also in line as an "Accounts Professional", I need to break my mind in the end of the year!!!.

Hope you now understand and agree with me.

Thanks and regards,

Ranganathan.K

 

 

"The "not convinced" is also in line as an "Accounts Professional", I need to break my mind in the end of the year!!!. Hope you now understand and agree with me."

Dear K. Rangathan ji,

Some one from other profession may have privilege to think so,   being accountant SIR you can not.

Some one who is not from ACCOUNTS background / knowledge, they may take some time to understand the valid logic.    

For accountants, it may be so till we realise the reason for it.   Later, you may profess why it is so and why it is valid.

Do not worry.    

 

AGREE WITH RAO JI

Respected Ranganathan Sir,

There are subtle differences in preparation of fianacial statements and other provisions in fianancial accounting  and accounting  statements prepared for taxation.The aim of the taxation sysytem in India is to collect maximum tax.The profit calculated as per Fianacial accounting is not accepted as per Income tax authorities and the calucation of profit as per income tax is differtent as it allows some expenses and incomes and disallows  many expenses and incomes which are  considered and allowed in financial accounting.The goal of companies act or MCA is the proper presenatation of the fiancial statements so as to protect the interest of various stakeholders,whereas the main goal of the income tax department is to maximize the revenue for the government.There is scope for evading tax eventhough if the statements are correctly furnished as per the companies act or the MCA guidelines.Regarding depreciation rates  criteria for asset recognition,valuation and rates of depreciation and other concepts are different under both the acts.The difference is due to the scope and goal of the both acts.