{"id":388,"date":"2012-07-02T10:39:33","date_gmt":"2012-07-02T10:39:33","guid":{"rendered":"http:\/\/xbrlexperts.in\/blog\/?p=388"},"modified":"2022-07-20T14:03:50","modified_gmt":"2022-07-20T14:03:50","slug":"changes-to-latest-schedule-vi-of-companies-act-1956","status":"publish","type":"post","link":"https:\/\/prathamconsult.com\/bak-main\/blog\/2012\/07\/02\/changes-to-latest-schedule-vi-of-companies-act-1956\/","title":{"rendered":"Changes to Latest Schedule VI of Companies Act, 1956"},"content":{"rendered":"

Schedule VI<\/strong> <\/span>of Companies Act stipulates the format in which every company should prepare and present its Balance Sheet and Profit & Loss account. These stipulations ensure comprehensive presentation of the financial performance and position of a company. This enables a fair comparison of the company\u2019s performance against its own historical performance, as well as comparison with other companies.<\/p>\n

Changes to Schedule VI were brought about by MCA in March 2011. A concise description of these changes is presented herein.<\/p>\n

1.Classification:<\/strong> <\/span>These comprise of a set of changes dealing with how facts are recorded in the financial reports. The table below shows the major changes in classification of assets and liabilities<\/p>\n\n\n\n\n\n\n\n
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Revised Schedule VI Classification<\/strong><\/span><\/p>\n<\/td>\n

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Earlier Schedule VI Classification<\/strong><\/span><\/p>\n<\/td>\n<\/tr>\n

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Asset Classification under two categories, Current Assets and Non-current Assets<\/p>\n<\/td>\n

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No such classification existed previously<\/p>\n<\/td>\n<\/tr>\n

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Fixed Assets are classified into Tangible and Intangible assets<\/p>\n<\/td>\n

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No such classification existed previously<\/p>\n<\/td>\n<\/tr>\n

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New category of Fixed assets, Intangible Assets Under Development added<\/p>\n<\/td>\n

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No such category existed previously<\/p>\n<\/td>\n<\/tr>\n

\n

Liabilities are classified under Current and Non-current. Constituents of Current and Non-current liabilities modified<\/p>\n<\/td>\n

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There was no classification as Non-Current Liabilities. Earlier the liabilities were classified into Share Holders Funds, Loan Funds, Deferred Tax Liability and Current Liability.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

2. Representation: <\/strong><\/span>These changes pertain to how facts are represented in the financial report.<\/p>\n\n\n\n\n\n
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Revised Schedule VI Representation<\/strong><\/span><\/p>\n<\/td>\n

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Earlier Schedule VI Representation<\/strong><\/span><\/p>\n<\/td>\n<\/tr>\n

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Debit balance in the Profit & Loss Account is to be adjusted with values shown under the Surplus head. In case the value under Surplus is still negative, this needs to be adjusted with the balance against Reserves and Surplus.<\/p>\n

In case the value under Surplus is still negative after the above adjustments, it needs to be represented as a negative value under Liabilities.<\/p>\n<\/td>\n

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Debit balance in the Profit & Loss account shall be shown under ASSETS side after deduction from uncommitted reserves (if any)<\/p>\n<\/td>\n<\/tr>\n

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Share Application Money Pending Allotment need to be shown separately under shareholders funds and not under Reserves and surplus<\/p>\n<\/td>\n

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Share application money pending allotment was included in the Reserves and Surplus.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Nomenclature:<\/strong><\/span> Schedule VI has also been modified to include changes in nomenclature.<\/p>\n