Thursday, March 3, 2011

Revised Schedule VI

The Ministry of Corporate Affairs (MCA) has issued a revised Schedule VI to the Companies Act 1956 on the 28th February 2011.

This revised Schedule VI has nothing to do with the converged Indian Accounting Standards (IND AS) as notified by the Ministry earlier. The Schedule has been framed been framed as per the existing non-converged Indian Accounting Standards (AS) notified under the Companies (Accounting Standards) Rules, 2006. This Schedule will apply to all the companies registered with ROC for the financial statements to be prepared for the financial year 2010 - 2011 and onwards.

The highlights of the Revised Schedule VI is as follows:

1. Applies to all companies following non-converged Indian Accounting Standards

2. No possibility of conflict between Accounting Standard and Schedule VI as on modification of accounting standards prescribed under the companies act, Schedule VI would stand modified accordingly

3. The disclosure requirement of revised Schedule VI are in addition to that required by Accounting Standards prescribed under the Companies Act

4. All disclosures required by Companies Act to be made in notes to accounts

5. Cross-referencing each line item with notes and vice versa required

6. Unit of measurement selected to used uniformly in financial statements

7. One year comparatives required

8. Classification of all assets and liabilities into current and non-current

9. Definition of current asset and current liability in line with converged Ind AS 1 or IAS 1

10. Nature and purpose of each reserve to be stated only for those aggregated under “Other Reserves”

11. Debit balance of Profit and Loss Account to be shown as negative figure in Surplus

12. Reserve and Surplus balance can be negative

13. Period and amount of continuing default as on the balance sheet date in repayment of loans and interest to be separately specified

14. Dividends proposed to be disclosed

15. Expenses in Statement of Profit and Loss to be classified based on nature of expenses

16. Gain / Loss on foreign currency transaction to be separated into finance costs and other expenses

17. Disclosure of quantitative details of goods diluted.

Please click on the link above for a copy of the Revised Schedule VI.

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