Revised Schedule VI,
Companies Act, 1956
CA ASHOK SETH, Lucknow
B. Sc., FCA, DISA (ICA)
as@sethspro.com
Introduction
 MCA Notified Revised Schedule VI
(RS) on 28th Feb 2011 amended on
30th March 2011
 RS based upon the existing nonconverged Indian Accounting
Standards Notified under Rules 2006.
 RS applicable on accounts starting on
or after 1st April 2011 (i.e. for FY
2011-12)
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Accounting Standards &
Revised Schedule VI
 General Instructions provides that
requirements of RS shall stand modified
with requirement of Act including
Accounting Standards.
 The disclosure requirements of RS are in
addition to and not in substitution of the
disclosure requirements specified in the
Accounting Standards.
 Terms used –as per applicable AS
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At a Glance
Only Vertical format allowed
Introduction of Format for P&L also
Existing Part III & Part IV done away
The narrative descriptions or
disaggregation to be presented in
Notes instead of schedule format.
 Each item of BS and P&L to be cross
referenced to related information in
notes.




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General
 Previous year’s figures need to be
given in the revised format along
with the current financials.
 Limits of Rounding offTurnover
Rounding Off
Less Than 100 Crore
To the nearest hundreds,
thousands, lakhs or millions,
or decimals thereof.
More Than 100 Crore
To the nearest lakhs, millions
or crores, or decimals thereof.
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OVERVIEW
 Part 1- Format of Balance Sheet and
General Instructions
 Part 2- Format of Profit & Loss
account and General Instructions
“Broad heads shall be decided taking into
account the concept of materiality and
presentation of true and fair view of financial
statements,”.
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Liability Side of Balance Sheet
I EQUITY AND LAIBILITIES (Old Sources
of funds)
1. Shareholders’ funds
a) Share Capital
b) Reserves and surpluses
c) Share warrants
2. Share application money pending
allotment
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3. Non-Current Liabilities
a) Long-term Borrowings
b) Deferred Tax Liabilities (Net)
c) Other Long term liabilities- e.g.
Security Deposits
d) Long-term provisions e.g. Provision
for Gratuity etc.
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4. Current liabilities
a) Short Term Borrowings
b) Trade Payables
c) Other Current Liabilities
d) Short-Term Provisions
ALL IETMS TO BE CROSS REFRENCED
WITH NOTE NUMBERS
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II ASSETS (Old Application of Funds)
1. Non Current Assets
a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iii) Capital work-in-progress
(iv) Intangible assets under development
b) Non-current investments
c) Deferred tax assets (net)
d) Long-term loans and advances
e) Other non-current assets
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2. Current Assets
a) Current investments
b) Inventories
c) Trade receivables
d) Cash and cash equivalents
e) Short-term loans and advances
f) Other current assets
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GENERAL INSTRUCTIONS
BALANCE SHEET
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Current Assets- satisfying ANY
of the following Criteria
a) Expected to be realized in, or intended
for sale or consumption in, normal
operating cycle;
b) held primarily for the purpose of being
traded;
c) expected to be realized within twelve
months after the reporting date; or
d) is cash or cash equivalent unless it is
restricted from being exchanged or used
to settle a liability for at least twelve
months
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Normal Operating Cycle
 RM Transit Period
 Holding Period of RM
 Production Cycle
 Holding Period of FG
 Collection period of Drs.
Normal Operating Cycle
½m
3m
½m
1m
2m
7m
 Where the normal operating cycle
cannot be identified, it is assumed to
have a duration of 12 months.
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Current Liability- satisfying ANY
of the following Criteria
a) Expected to be settled in the company’s
normal operating cycle;
b) Held primarily for the purpose of being
traded;
c) 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.
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“Trade Receivable” and “Trade
Payable”
 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 the normal course
of business.
 A payable shall be classified as a ‘trade
payable’ if it is in respect of the amount
due on account of goods purchased or
services received in the normal course
of business.
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New Disclosure Requirements
 SHARE CAPITAL- for each class of SC
 Reconciliation of the number of shares at
the beginning and at the end.
 The rights, preferences & restrictions
attached to each class of shares
 Shares of each class held by its holding
company or its ultimate holding company
including shares held by or by
subsidiaries or associates of the holding
company or the ultimate holding
company in aggregate.
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Share Capital- Contd.
 Shares held by each shareholder
holding more than 5 percent shares
specifying no. of shares held.
 Shares reserved for issue under
options and contracts/commitments
for the sale of shares/disinvestment,
including the terms and amounts
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Share Application Money
New Exhaustive disclosure requirement:
 Terms and conditions for issuance of
shares
 Amount of premium & period before
which new shares need to be issued
 Period of pendency of such allotment
and reasons for such
 That there is sufficient authorized capital
to cover the share capital amount
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Reserve & Surplus
 The balance of ‘Reserves and
Surplus’, after adjusting negative
balance of surplus (profit & loss
account), if any, shall be shown
under the head ‘Reserves and
Surplus’ even if the resulting figure is
in the negative.
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Long Term BorrowingsSignificant New Disclosures
 Related parties’ transactions in case
of long term loans and advances as a
sub line item of long term
borrowings.
 Terms of repayment of all loans
 Period and amount of continuing
default as on the BS date in
repayment of loans & interest, to be
specified separately in each case
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Other Long Tern Liabilities and
Provisions
 Other Long term Liabilities shall be
classified as:
 (a) Trade payables
 (b) Others
 Long-term provisions - shall be
classified as:
 (a)Provision for employee benefits.
 (b)Others (specify nature).
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Significant additional Disclosure
 In Short term borrowings
 From Related parties’ transactions
 Period and amount of continuing default as on
the balance sheet date
 In Other current liabilities
 Interest accrued but not due on borrowings- for
interest payable within 12 months
 Application money received for allotment of
securities and due for refund
 In Short term provisions
 Provision for employee benefits. Current part to
appear here.
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Tangible Assets
 Assets under lease shall be separately
identified under each class of asset.
 Separate Disclosure requirement for
Office Equipment
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Presentation of Tangibles
Gross:
Opening Balance
Additions
Acquisitions through Business
combination
 Other Adjustments
Sub-total
 Less: Disposals
Gross block at year end




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Presentation of TangiblesContd.
Less: Depreciation/Amortization
 Opening depreciation/amortization
 Depreciation/Amortization of the
year
 Impairment loss/Reversal of
Impairment Loss
Total depreciation at year end
Net Carrying Value
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Intangible Assets- To be
classified into
Goodwill
Brands/trademarks
Computer software
Mastheads and publishing titles
Mining rights
Copyrights, and patents and other
intellectual property rights, services, and
operating rights
 Recipes, formulae, models, designs and
prototypes
 Others (Specify nature )






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Non Current Investments
i. Trade Investments
ii. Other Investments
 and further classified as:-
i.







Investment Property (Refer AS 13)
Investment in Equity Instruments
Investment in Preference Shares
Investment in Government or trust securities.
Investments in debentures or bonds.
Investments in Mutual Funds
Investment in Partnership firms.
Other Non-current Investments
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Long Term Loan & Advances- to
be Classified as
1. Capital advances (Not in CWIP)
2. Security deposits
3. Loans and advances to related
parties (giving details thereof)
4. Other loans and advances
 shall also be sub-classified as:
 Secured, considered good;
 Unsecured, considered good;
 Doubtful.
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Other Non Current Assets
i. Long Term Trade Receivables
Trade receivable realizable beyond 12
months from end of the reporting period
balance should be disclosed under current
assets category
ii. Others (Specify Nature)
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CURRENT ASSETS- Significant
Changes
 Inventories to be classified as:  Raw materials; Work-in-progress;
 Finished goods;
 Stock-in-trade (in respect of goods acquired
for trading);
 Stores and spares; Loose tools;
 Others (specify nature).
 Goods in transit shall be disclosed
under the relevant sub-head of
inventories
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CURRENT ASSETS- Significant
Changes
 “Sundry Debtors” replaced with
“Trade Receivables”
 The revised Schedule VI requires
separate disclosure of “trade
receivables outstanding for a period
exceeding 6 months from the date
they became due for payment.”
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CURRENT ASSETS- Significant
Changes
 Balance with Non- Scheduled banks not
to be shown separately.
 To be stated separately
 Earmarked balances with banks (for
example, for unpaid dividend)
 Balances with banks to the extent held as
margin money or security against the
borrowings, guarantees, other commitments
 Repatriation restrictions, if any, in respect of
cash and bank balances
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Major Disclosers- Omitted
 Various disclosure under Micro , small
and medium enterprises development
Act 2006
 Separate disclosures to dues to
subsidiaries
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Profit & Loss Statement
i.
ii.
iii.
iv.
Revenue from operations
Other Income
Total Revenue (I + II)
Expenses
 Cost of Material consumed
 Purchases of Stock in trade
 Changes in Inventories of Finished goods , Work in
progress and stock in trade
 Employee Benefits expenses
 Finance costs
 Depreciation and amortization expenses
 Other expenses
 Total Expenses
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Profit & Loss Statement- Contd.
v. Profit before exceptional and
extraordinary items and tax (III - IV)
vi. Exceptional items
vii.Profit before extraordinary items and
tax (V - VI)
viii.Extraordinary items
ix. Profit before tax (VII - VIII)
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Profit & Loss Statement- Contd.
x. Tax expense:
 (1) Current tax
 (2) Deferred tax
xi. Profit (loss) for the period from
continuing operations (VII - VIII)
xii.Profit (loss) from discontinuing
operations
xiii.Tax expense of discontinuing
operations
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Profit & Loss Statement- Contd.
xiv.Profit/(loss) from discontinuing
operations (after tax) (XII - XIII)
xv.Profit (Loss) for the period (XI +
XIV)
xvi.Earnings per Equity Share:
(1) Basic
(2) Diluted
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Major Changes
 No Appropriation Account- Dividend,
Transfer to and from Reserves to be
shown under “Reserve and Surplus”
heading in BS
 Proposed dividend should be shown
as appropriation item in Reserve &
Surplus section and corresponding
liability for proposed dividend under
short term provision.
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Proposed Dividend
RESERVES & SURPLUS
Balance
as on 1-4-2011
Additions/
Balance
Deductions/
as on 31-32012
Appropriations
General Reserve
554.00
Surplus
100.00
Profit after Tax for the
year
654.00
300.00
Less Trf. to General
Reserve
Less Proposed
Dividend
(100.00)
(50.00)
Less DD Tax
(7.50)
Balance
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100.00
242.50
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Major Changes- Contd.
 Excise Duty to be shown in Notes and
NOT on the face of P&L
 The borrowing cost portion of forex
fluctuation gain/loss on foreign
currency transaction shall now be
part of finance cost. Rest shall be
shown as forex fluctuation gain/loss
as part of general administrative cost
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Major Changes- Contd.
 The limits of disclosure requirement
enhanced from higher of 1% of
revenue or Rs. 5000 to higher of 1%
of revenue or Rs. 1,00,000. The limits
now applicable to disclosure of
income also.
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Major Disclosers Omitted
 Details of amount and quantity of turnover
for each class of goods.
 Details pertaining to licensed /installed and
production quantity.
 Details of opening and closing stock of
goods
 Quantity related information related to raw
material consumption
 Details of arrear depreciation.
 Director remuneration under s 198.
 Computation of Net profit under s 349/350
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Key Differences with IFRS
 IFRS allows expenses to be classified
by nature or function.
 IAS 1 does not recognize
extraordinary items
 IFRS does not require exceptional
items on face of P&L Statement
 In IFRS Prior Period items are
corrected by retrospective restatement.
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Key Differences with IFRSContd.
 In IFRS affect of changes in
Accounting policies has to be given
retrospective effect.
 IFRS requires presentation of
statement of Other Comprehensive
Income.
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Thank You
Please mail your comments to
as@sethspro.com
Any Questions?
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