While preparing Ind AS Financial Statements we sometimes wonder where to report Fixed deposit with banks of different maturity periods and different category like Open FD or Margin Money.
To simply this below chart is prepared with examples which will help you to quickly judge exactly where to report what kind of FDs in the financial statement.
Before that some important points to be noted:
1. Bank deposits kept as margin money can never be reported under “Cash and Cash equivalents” what so ever may be the maturity tenure.
2. Secondly the Bank Overdraft Account having a credit balance at the reporting date although forms part of cash and cash equivalents while preparing the cash flow statements but should not be reported under cash and cash equivalents in the balance sheet.
The extract of Schedule III Division II of Ind AS Financial Statement for quick reference
“Cash and Bank Balances
(i) Cash and cash equivalents shall be classified as:
(a) Balances with banks (of the nature of cash and cash equivalents);
(b) Cheques, drafts on hand;
(c) Cash on hand;
(d) Others (specify nature).
(ii) Bank balances other than cash and cash equivalents as above, shall be disclosed below cash and cash equivalents on the face of the Balance Sheet”
This above point (a) may be further divided into
(i) Balances in Current Account of Bank
(ii) Balances in Deposit Accounts with original maturity of 3 months or less
Here 3 months’ maturity may be considered as 90 days as it is not specifically mentioned how to calculate the 3 months’ maturity.
The extract of Face of Current Asset of Balance sheet looks like as below:
“Current assets
(a) Inventories
(b) Financial Assets
(i) Investments
(ii) Trade receivables
(iii) Cash and cash equivalents
(iv) Bank balances other than(iii) above
(v) Loans
(vi) Others (to be specified)
(c) Current Tax Assets (Net)
(d) Other current asset”
Now let us explain the reporting with the help of below examples:
| Reporting date | 31-03-2024 | ||||||
| S No | Bank Name | Principal (Rs) | Date of creation | Date of Maturity | No of days | Category | Disclosure |
| 1 | FD with XYZ Bank | 1,00,000 | 15-01-2024 | 13-04-2024 | 90 | FD with original maturity is three months or less | Cash and Cash Equivalents |
| 2 | FD with XYZ Bank | 2,50,000 | 15-01-2024 | 15-06-2024 | 153 | FD with original maturity is more than 3 months but less than 12 months | Bank Balances other than Cash and Cash Equivalents |
| 3 | FD with XYZ Bank | 3,75,000 | 15-01-2024 | 30-01-2025 | 382 | FD with original maturity more than 12 months and remaining as at reporting date is less than 12 months | Other Financial Assets (Current) |
| 4 | FD with XYZ Bank | 5,00,000 | 15-01-2024 | 30-06-2025 | 533 | FD with original maturity more than 12 months and remaining as at reporting date is also more than 12 months | Other Financial Assets (Non-current) |
| 5 | FD with XYZ Bank (Margin Money) | 7,00,000 | 15-01-2024 | 12-04-2024 | 89 | FD (Margin money) with original maturity is equal to or less than 90 days | Bank Balances other than Cash and Cash Equivalents (Separately disclose as Margin Money) |
| 6 | FD with XYZ Bank (Margin Money) | 4,80,000 | 15-01-2024 | 15-06-2024 | 153 | FD (Margin money) with original maturity is equal to or less than 1 year | Bank Balances other than Cash and Cash Equivalents (Separately disclose as Margin Money) |
| 7 | FD with XYZ Bank (Margin Money) | 8,00,000 | 15-01-2024 | 30-01-2025 | 382 | FD (Margin money) with original maturity is more than 1 year but remaining maturity as at reporting date is equal to or less than 1 year | Other Financial Assets (Current), disclose as margin money |
| 8 | FD with XYZ Bank (Margin Money) | 6,78,000 | 15-01-2024 | 30-06-2025 | 533 | FD (Margin money) with original maturity is more than 1 year and remaining maturity as at reporting date is also more than 1 year | Other Financial Assets (Non-current), disclose as Margin money |
Conclusion: This chart and the provided examples aim to simplify the reporting of bank deposits in your Ind AS financial statements. By following these guidelines, you can ensure accurate and consistent classification of fixed deposits based on their maturity and category. Your comments and feedback are welcome. Thank you.
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