OCTOBER 17,2012

Comparison – old and revised content of Schedule VI
Major Differences: Parameters
Old Schedule VI New Schedule VI
Comprised of :
Part 1: Balance Sheet
Part 2: P/Loss Account
Part 3: Interpretations
Part 4: B/S Abstract and Company’s
General Business
Profile
Comprises of:
Part 1: Balance Sheet
Part 2: Statement of
Profit and Loss

Comparison – old and revised content of Schedule VI
Major Differences: Parameters
Old Schedule VI New Schedule VI
Silent on the issue of whether the Schedule
VI overrides the accounting standards.
It addresses the issue by clearly providing that the accounting standards will override Schedule VI.
Thus AS prevail over
Schedule VI.

Comparison – old and revised content of Schedule VI
Major Differences: Parameters
Old Schedule VI New Schedule VI
Both horizontal and vertical format permitted.
Only vertical format permissible.

Comparison – old and revised content of Schedule VI
Major Differences: Parameters
Old Schedule VI New Schedule VI
No prescribed format for Profit and Loss
Account. Only minimum requirements were specified.
Format of Profit and
Loss account is prescribed.

Comparison – old and revised content of Schedule VI
Major Differences: Parameters
Old Schedule VI
No guidance on presentation of notes to the accounts.
New Schedule VI
Guidance on presentation of notes to accounts given in addition to information presented in the financial statements. It shall provide wherever required;
(a) narrative descriptions or disaggregations of items recognised in those statements and (b) information about items that do not qualify for recognition in those statements.

Presentation format of Balance Sheet under revised Schedule – VI
Name of the Company…………………….
Balance Sheet as at ………………………
Particulars Note
No.
Figs. as at the end of current reporting period
(Rupees in………………………)
Figs. as at the end of the previous reporting period
1
I.
Equity and Liabilities
(1) Shareholders’ funds
(a)
(b)
Share capital
Reserves and surplus
(c) Money received against share warrants
(2) Share application money pending allotment
(3) Non-current liabilities
(a)
(b)
(c)
Long-term borrowings
Deferred tax liabilities (Net)
Other Long term liabilities
(d) Long-term provisions
(4) Current liabilities
(a) Short-term borrowings
(b)
(c)
Trade payables
Other current liabilities
(d) Short-term provisions
Total
II. Assets
(1) Non-current assets
(a)
(i)
(ii)
(iii)
(iv)
(b)
(c)
Non-current investments
Deferred tax assets (net)
(d) Long-term loans and advances
(e)
(2) Current assets
Other non-current assets
(a)
(b)
(c)
(d)
(e)
(f)
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Intangible assets under development
Current investments
Inventories
Trade receivables
Cash and Bank Balances
Short-term loans and advances
Other current assets
Total
See accompanying notes to the financial statements.
2 3 4

Key highlights for presentation and preparation of Balance Sheet format under revised Schedule VI
• •
Only vertical form of balance sheet is permitted.
• •
Shareholders’ funds to be shown after deduction of debit balance of profit and loss account.
• •
Separate head for “Miscellaneous Expenditure to the extent not written off or adjusted”
• •
Current and non- current classification of assets and liabilities required on the lines of Ind AS
• •
Concept of operating cycle introduced
• •
Separate head for
– money received against share warrants
– intangible assets
– intangible assets under development
– cash and cash equivalents

Requirements for various items of balance sheet
Equity and
Liabilities
•
• Shareholders’ Funds
•
• Share application money pending allotment
•
• Non-Current Liabilities
–
–
–
–
–
–
–
–
Long term borrowings
Deferred tax liabilities (Net)
Other Long term liabilities
Long-term provisions
ü
ü
ü
Provision for employee benefits.
.
.
•
• Current Liabilities
–
–
–
–
Short term borrowings
Trade payables
–
–
–
–
Other current liabilities
Short-term provisions

Requirements for various items in Balance Sheet under revised Schedule VI
Equity and
Liabilities
A company is required to disclose the following in the notes to accounts:
A.Share Capital: for each class of share capital (different classes of preference shares to be treated separately)
B.Reserves and Surplus
C.Money received against share warrants

Requirements for various items in Balance Sheet under revised Schedule VI
Equity and
Liabilities
Revised Schedule VI requires a separate disclosure in respect of share application money pending allotment. It may be noted here that:
• Share application money pending allotment not to be presented within
Shareholders’ funds as a separate line item.
• Only the amount not due for refund be shown under Share application money pending allotment.
• Amount due for refund should be shown under “Other Current Liabilities” along with interest accrued thereon.

Requirements for various items in Balance Sheet under revised Schedule VI
Equity and
Liabilities
The revised Schedule VI requires a current and non-
current classification of assets and liabilities. It provides the criteria for classification of liabilities into current and non-current and prescribes that :
A liability shall be classified as current when it satisfies any of the following criteria:
(a) Settled in the company’s normal operating cycle;
(b) It is held primarily for the purpose of being traded;
(c) It is due to be settled within twelve months after the reporting date; or
(d) The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
All other liabilities shall be classified as non-current and needs to be presented within the following 4 broad heads on the face of balance sheet:
(a) Long-term borrowings
(b) Deferred tax liabilities (Net)
(c) Other Long term liabilities
(d) Long-term provisions

Requirements for various items in Balance Sheet under revised Schedule VI
Equity and
Liabilities
The revised Schedule VI requires a current and non-
current classification of assets and liabilities. It provides the criteria for classification of liabilities into current and non-current and prescribes that :
A liability shall be classified as current when it satisfies any of the following criteria:
(a) Settled in the company’s normal operating cycle;
(b) It is held primarily for the purpose of being traded;
(c) It is due to be settled within twelve months after the reporting date; or
(d) The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities need to be presented within the following 4 broad heads on the face of balance sheet:
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions

Requirements for various items in Balance Sheet under revised Schedule VI
Assets v v Non-current Assets q q Fixed Assets
― Tangible assets
― Tangible assets
― Intangible assets
― Intangible assets
― Capital work-in-progress
― Capital work-in-progress
― Intangible assets under development
― Intangible assets under development q q Non-current Investments q q Deferred tax assets (net) q q Long term loans and advances q q Other non-current assets v v Current Assets q q Current Investments q q Inventories q q Trade Receivables q q Cash and Bank Balances q q Short-term loans and advances q q Other current assets

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
A.
Tangible Assets: Revised Schedule VI requires that tangible assets be classified as under:
1. Land, 2. Buildings, 3. Plant and Equipment, 4.
Furniture and Fixtures, 5. Vehicles, 6. Office equipment, 7. Others
See: AS 6,10,19 for guidance
B.
Intangible assets: Revised Schedule VI requires that intangible assets be classified as under:
1. Goodwill, 2. Brands /trademarks, 3. Computer software, 4. Mastheads and publishing titles,
5. Mining rights, 6. Copyrights, patents and other IPR services and operating rights, 7.
Recipes, formulae, models, designs and prototypes, 8. Licenses and franchise, 9.
Others.
See: AS 26 for guidance

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Non-current investments shall be classified as trade investments and other investments and further classified as:
(a) Investment property;
(b) Investments in Equity
Instruments;
(c) Investments in preference shares
(d) Investments in Government or trust securities;
(e) Investments in debentures or bonds;
(f) Investments in Mutual Funds;
(g) Investments in partnership firms
(h) Other non-current investments
(specify nature)

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
The revised Schedule VI requires that deferred tax assets and liabilities be presented as non-current i.e. separately from current assets and current liabilities . The old Schedule
VI is silent on this aspect.
See: AS 22 for guidance

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Long term loans and advances should be classified as under:
(a) Capital Advances;
(b) Security Deposits;
(c) Loans and advances to related parties
(giving details thereof);
(d) Other loans and advances (specify nature).
The above shall also be separately subclassified as:
(a) Secured, considered good;
(b) Unsecured, considered good;
(c) Doubtful.

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Other non-current assets should be classified as:
(i) Long Term Trade Receivables (including trade receivables on deferred credit terms);
(ii) Others (specify nature)
In this regard, the following should also be noted:
1. A receivable shall be classified as a ‘trade receivable’ if it is in respect of the amount due on account of goods sold or services rendered in business.
2. Long term Trade Receivables, shall be sub-classified as:
(a) Secured, considered good;
(b) Unsecured considered good;
(c) Doubtful
3. Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately.
4. Debts due by directors or other officers of the company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any director is a partner or a director or a member should be separately stated.

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Current
Assets

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Current
Assets

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Current
Assets

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Current
Assets

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Current
Assets

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Current
Assets

Requirements for various items in Balance Sheet under revised Schedule VI
Assets
Current
Assets

Requirements for various items in Balance Sheet under revised Schedule VI
Contingent liabilities and commitments Other disclosures in Notes to
A/c
See: AS 29 contingent liabilities
Other significant disclosures

Presentation format of Profit and Loss Statement under revised Schedule VI
Name of the Company…………………….
Profit and Loss Statement for the year ended …………
Particulars
I.
II.
III.
IV.
Revenue from operations(gross)
Less: Excise Duty
Revenue from operations (net)
Other income
Total Revenue (I + II)
Expenses:
Cost of materials consumed
Purchases of Stock-in-Trade
Changes in inventories of finished goods Work-in-progress and Stock-in-
Trade
Employee benefits expense
Finance costs
Depreciation and amortisation expense
Other expenses
Total expenses
Profit before exceptional and extraordinary items and tax (III – IV) V.
VI.
Exceptional items
VII.
Profit before extraordinary items and tax (V – VI)
VIII.
Extraordinary Items
IX.
X.
Profit before tax (VII – VIII)
Tax expenses:
XI.
(1) Current tax
(2) Deferred tax
Profit/(Loss) for the period from continuing operations (VII – VIII)*
Note
No.
xxx xxx
Figures as at the end of current reporting period xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
(Rupees in………………………)
Figures as at the end of the previous reporting period xxx xxx
XII.
Profit/(Loss) from discontinuing operations
XIII.
Tax expense of discontinuing operations
XIV.
Profit/(loss) from Discontinuing operations (after tax) (XII – XIII) xxx xxx xxx xxx xxx xxx
XV.
Profit (Loss) for the period (XI + XIV)
XVI.
Earnings per equity share:
(1) Basic
(2) Diluted
* This should be read as IX – X – XIV xxx xxx xxx xxx xxx xxx
See accompanying notes to the financial statements.

Key highlights for presentation and preparation of Profit and Loss statement under revised Schedule VI

Requirements for various items of statement of Profit and Loss under revised Schedule VI
Requirements: relating to Income
Ø
Ø Revenue
•
• For other than finance companies
•
• For finance companies
•
• For companies rendering or supplying services
•
• For other companies
Ø
Ø Other Income

Requirements relating to Income
Revenue from operations
(a) sale of products;
(b) sale of services;
(c) other operating revenues.
(d) = (a) + (b) + (c)
(e) = (d) – Excise duty
See: AS 9 on Rev. Recognition
Revenue from operations
(a) Rev. from interest;
(b) Rev. from other financial services.
Gross income derived from services rendered or supplied under broad heads should be disclosed.
Broad heads shall be decided based on materiality and presentation of true and fair view of financial statements.
Gross income derived under broad head should be disclosed.

Requirements relating to Income
Classifications of other income
Ø Interest Income (in case of a company other than a finance company);
Ø Dividend Income;
Ø Net gain/loss on sale of investments;
Ø Other non-operating income (net of expenses directly attributable to such income).
What has been dispensed with?
Ø No bifurcation between income from trade investments and other investments.
Ø No need to disclose TDS while presenting gross figures of income from: a) interest; b) Investments.

Requirements for various items of statement of profit and loss
Requirements: relating to Expenses
Ø
Ø Raw material and work in progress
Ø
Ø Finance costs
Ø
Ø Employee benefits expense
Ø
Ø Depreciation and amortization expense
Ø
Ø Payment to auditors
Ø
Ø Other Expenses
Ø
Ø Prior period items
Ø
Ø Exceptional and extraordinary Items
Ø
Ø Discontinuing Operations
Ø
Ø Amounts set aside for reserves, provision for contingencies etc.
Ø
Ø Imports/foreign exchange income, expenditure etc.

Requirements relating to Expenses
Disclosure requirements for raw materials
S.N.
Type of Companies
1.
Manufacturing
Companies
Disclosure requirements for raw material consumed & goods purchased
(1)Raw materials under broad heads.
(2)Goods purchased under broad heads.
2.
Trading Companies Purchases in respect of goods traded in by the company under broad heads.
3.
Diversified
Companies (more than one of the categories)
Purchases, sales and consumption of raw material and the gross income from services rendered is shown under broad heads.
Work in progress to be disclosed under broad heads.

Requirements relating to Expenses
Finance costs should be classified as:
(a) Interest expense;
(b) Other borrowing costs;
(c) Applicable net gain/loss on foreign currency transactions and translation.
Also See: AS 16 on “Borrowing Costs”

Requirements relating to Expenses
The following amounts in respect of employee benefit expenses should be shown separately-
1.Salaries and wages;
2.Contribution to provident and other funds;
3.Expense on Employee Stock
Option Scheme (ESOP) and
Employee Stock Purchase Plan
(ESPP);
4.Staff welfare expenses;

Requirements relating to Expenses
The following amounts need to be shown separately -
1.Depreciation
(See AS 6 and Schedule XIV of Company’s
Act).
2.Amortisation
3.Impairment
(impairment amount would need to be shown by virtue of AS 28 on “Impairment of Assets”.

Requirements relating to Expenses
A Company shall disclose by way of notes additional information regarding aggregate expenditure on payments to the auditor as -
(a) auditor;
(b) for taxation matters;
(c) for company law matters;
(d) for management services;
(e) for other services;
(f) for reimbursement of expenses.

Requirements relating to Expenses
Expenditure incurred on each of the following items forming part of “Other expenses” as shown on the face of statement of profit or loss should be separately disclosed in the notes to the accounts for each item:—
(a) Consumption of stores and spare parts.
(b) Power and fuel.
(c) Rent.
(d) Repairs to buildings.
(e) Repairs to machinery.
(g) Insurance.
(h) Rates and taxes, excluding, taxes on income.
(i) Miscellaneous expenses
Besides, the following items would also require a separate disclosure:
• Any item of income or expenditure which exceeds one per cent of the revenue from operations or Rs. 1,00,000, whichever is higher
• Net gain/loss on sale of investments;
• Adjustments to the carrying amount of investments;
• Net gain or loss on foreign currency transaction and translation (other than considered as finance cost).

Requirements relating to Expenses
Separate disclosure by way of notes of additional information regarding aggregate expenditure and income in respect of prior period items.
As no further guidance given in revised Schedule VI on prior period items, guidance from AS 5 on “Net
Profit or Loss for the Period, Prior
Period Items and Changes in
Accounting Policies” is taken.

Requirements relating to Expenses
Separate disclosure required on the face of statement of profit or loss below aggregate expenditure and income. No further guidance given in revised Schedule VI on
Exceptional and extraordinary
Items. Thus guidance from AS 5 on “Net Profit or Loss for the
Period, Prior Period Items and
Changes in Accounting Policies” is taken.

Requirements relating to Expenses
Separate disclosure of the following items on the face of statement of profit or loss pertaining to discontinuing operations required:
Profit/(loss) from xxx discontinuing operations
Tax expense of discontinuing operations xxx
Profit/(loss) from xxx discontinuing operations (after tax)

Requirements relating to Expenses
Following information should be disclosed in notes to accounts:
• The aggregate, if material, of any amounts set aside or proposed to be set aside, to reserve, but not including provisions made to meet any specific liability, contingency or commitment known to exist at the date as to which the balance-sheet is made up.
• The aggregate, if material, of any amounts withdrawn from such reserves.
• The aggregate, if material, of the amounts set aside to provisions made for meeting specific liabilities, contingencies or commitments.
• The aggregate, if material, of the amounts withdrawn from such provisions, as no longer required.

Requirements relating to Expenses
The profit and loss account should contain following information by way of a note:
(a)Value of imports calculated on C.I.F basis by the company during FY on — Raw materials, Components & spare parts and Capital goods.
(b)Expenditure in foreign currency during the FY on account of royalty, know-how, professional, consultation fees, interest, and other matters.
(c)Total value of all imported raw materials, spare parts and components consumed during the financial year and the total value of all indigenous raw materials, spare parts and components similarly consumed and the percentage of each to the total consumption.
(d)The amount remitted during the year in foreign currencies on account of dividends with a specific mention of the total number of non-resident shareholders, the total number of shares held by them on which the dividends were due and the year to which the dividends related.
(e)Earnings in foreign exchange classified under the following heads i.
Export of goods calculated on F.O.B. basis; ii. Royalty, know-how, professional and consultation fees; iii. Interest and dividend; iv. Other income, indicating the nature thereof.

XBRL

•
•
•
•

•
•
•

Vide General Circular No: 16/2012 dated 6th July 2012, MCA has decided that companies falling in the following categories will have to file their financial statements using the XBRL taxonomy for financial year commencing on or after 01 st April, 2011:
• all companies listed in India and their Indian subsidiaries; or
• all companies having paid up capital of Rs. 5 crores and above; or
• all companies having turnover of Rs. 100 crores and above; or
• all companies who were required to file their financial statements for
FY 2010-11, using XBRL.
However, banking companies, Power companies, NBFCs & Insurance companies are exempted from XBRL filing till further order.
All XBRL filing companies are allowed to file their financial statements without any additional fee/penalty upto 15th November 2012 or within
30 days of the date of their AGM, whichever is later.

•
•
•
•
•
•

•
The fact values are included in an XBRL instance document.
An instance document contains the XBRL tags with the data recorded between the tags.
•
Of course there will be additional data in the instance document
– contextual data and units of measurement - to tell the user the name of the organisation, the time period to which the instance document relates and many other necessary pieces of information to ensure that the recipient of that instance document is able to clearly understand what it is all about.

• Taxonomy
An XBRL taxonomy can be defined as an electronic description and classification system for the contents of financial statements and other business reporting documents.
Taxonomies may represent hundreds or even thousands of individual business reporting concepts, mathematical and definitional relationships among them, along with text labels in multiple languages, references to authoritative literature, and information about how to display each concept to a user.
• Tags
Individual elements within a taxonomy, e.g., net income.

•

•

•
•

Business rules are a way of expressing the business meaning (semantics) of a set of Information. Business rules exist in the form of relationships between various pieces of business information, e.g.,
Assertions, such as Assets = Liabilities +Equity
Computations, such as Total Current Assets=Inventories+ Receivables
+other current Assets
Regulations, such as “The following is the set of three things that must be reported if you have Investments:
Type of investment
Nature of investment
Valuation method
Instructions or documentation, such as “Cash flow statement should be classified into operating, financing, or investing.”

Element wise business rules specified by MCA
Out of over 3000 elements (items), business rules have been specified by MCA for over 400 elements. These business rules are fairly simple to understand and are very logical, e.g.,
• Equity & Liabilities : It should be equal to value entered in element 'Assets' in Balance sheet
• Minority Interests
: It is mandatory in case of Consolidated instance document. Should be greater than or equal to zero.
• Paid up Share Capital
: It is
Should be less than or equal to Subscribed Share Capital.
a mandatory field.
Should be >= 1 lakh in case of Private company (other than Sec. 25 co.) having share capital
Should be >= 5 lakh in case of Public company (other than Sec. 25 co.) having share capital
Should be > 0 in case of Section 25 company having share capital.
It should be equal to zero in case of company not having share capital.
Status of the company (Pvt. /Public/ Section 25) to be checked as on date of balance sheet, i.e., Date of end of reporting period.

• Step 1: Start with the financial statements of the company
The starting point is the financial statements of the company drawn in accordance with the applicable statute.
• Step 2: Map company’s each financial statement element to a corresponding element in the published taxonomy

• Step 3: Create instance document for Balance Sheet, Profit and
Loss Account, Cash Flow Statement, etc.
Separate instance documents need to be created for each component of the financial statements, viz.:
Standalone Balance Sheet
Standalone Profit and Loss Account
• Step 4: Review and verify the instance document
• Step 5: Download XBRL validation tool from MCA portal
• Step 6: Load the instance document

• Step 7: Use the tool to validate the instance document
• Step 8: Perform pre-scrutiny of the validated instance document through the tool
• Step 9: Convert to PDF and verify the contents of the instance document
• Step 10: Attach instance document to the Forms 23AC and
23ACA
• Step 11: Submitting the Forms 23AC and 23ACA on the MCA portal

sanjeev_singhal@jubl.com