Dear All,
Can anybody inform me if the accounts of a company are prepared as if it is a non-going concern, what are the points to be covered in the Notes to Accounts schedule from the point of view of Companies Act, 1956?
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Notes to accounts
Replies (2)
notes on accounts is maindetary part of balance sheet 7 profit & loss account. every as which is apply in the balance sheet shold be disclosed in notes on accounts.
Mr. Ajay,
The Companies Act, 1956 requires the companies registered under the act to prepare the accounts in line with the Schedule VI to the Act. Further it also requires the companies to follow the Accounting Standards issued by ICAI.
Now coming to the point, the going concern concept is covered under AS - 1 : Disclosure of accounting policies.
As per the AS, the following are the fundamental accounting assumptions, that are considered in any financial statements.
- Going Concern
- Accrual
- Consistency
It further mentions that any deviation from the above three assumptions should be reported separately in notes to accounts.
SO, in case the company ceases to be a going concern, the same shall be disclosed by way of notess to accounts.
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