Major Changes in Comparison to Old Schedule VI
1. Companies now have to follow Vertical Format for presentation of financial statements; horizontal format is no longer permitted by Revised Sch-VI.
2. The “Schedule No.” as required earlier has been replaced with “Note No.”
3. Number of shares held by each shareholder holding more than 5% shares now needs to be disclosed. Such information will be based on shares held as on the balance sheet date.
4. Balance Sheet Abstract and Company’s General Business Profile as provided in Part IV of Old Sch- VI has been removed.
5. Interpretation as required by Part III of old Sch-VI has been removed by revised Sch-VI.
6. Revised Sch-VI does not require the provision for proposed dividend to be made and only disclosure of same in notes to accounts is required. Though Revised Sch VI requires this, we cannot give such presentation until the AS-4 has been revised (because of overriding effect of accounting standards).
7. The quantitative disclosure in respect of raw material, opening and closing stocks for each class of goods in case of manufacturing companies and quantity details in respect of purchase made, opening and closing stocks as required under the old Sch-VI has been liquidated. Even the detailed quantitative informations in respect of each class of goods manufactured in regard to the licensed capacity, installed capacity and actual production is not required.
8. Assets & Liabilities have been classified as Current and Non Current.
9. Previously, fixed assets were shown under Single schedule but Tangible and Intangible fixed assets are required to be disclosed under separate schedules under Revised Sch-VI.
10. While classifying assets into current and noncurrent , the normal operating cycle of the companies needs to be identified but in case where the same cannot be identified, it is to be assumed to have duration of 12 months.
11. The term “sundry debtors” has been replaced with the term “trade receivables.” Trade receivables are defined as dues arising only from goods sold or services rendered in the normal course of business. Hence, amounts due on account of other contractual obligations, which were earlier included in the sundry debtors, can no longer be included in the trade receivables.
12. The revised Schedule VI requires the amount of trade receivables to be classified as current and noncurrent assets, based on the prescribed criteria.
13. Revised Schedule VI requires separate disclosure of “trade receivables outstanding for a period exceeding 6 months from the date they became due for payment”, under the head of “Current Assets”.
14. Previously, Sch-VI required “current assets and Loans & advances” to be disclosed in a single head, However, as Revised Sch-VI requires it to be bifurcated in “Current assets” and “Non-Current assets”, a new sub heading of “Long term loans & advances” under the heading of “Non-Current Assets” has been introduced.
15. Specific disclosures are prescribed for the share application money. The application money not exceeding the capital offered for issuance and to the extent not refundable will be shown separately on the face of the balance sheet. The amount in excess of subscription or if the requirements of minimum subscription are not met will be shown under “Other current liabilities.”
16. Previously, “Current liabilities and Provisions” were shown as deduction under Current Assets, but Revised Sch-VI requires these to be shown in the Upper part of the Balance Sheet as Separate Head of “Current Liabilities”.
17. Current maturities of a long term borrowings will have to be classified under the head “Other current liabilities.”
18. Loan liabilities were shown as “secured and unsecured” under the Old Sch-VI, but Revised Sch-VI requires loan liabilities to be shown as “Long term borrowings” and “Short term borrowings”; long term borrowings to be disclosed under the head of “Non Current Liabilities” and short term borrowings to be disclosed under the head of “Other Current Liabilities” as the subhead item of “Current Liabilities”.
19. Long term and Short term borrowings are again needed to be bifurcated into “Secured” and “Unsecured”.
20. Employee related provisions are classified as “Long term provisions” under the head of Non Current Liabilities by Revised Sch-VI
21. Any debit balance in P&L account will be disclosed under the head “Reserves and surplus.”
22. Additional information regarding aggregate income or expenditure exceeding 1 per cent of the Revenue from Operations or Rs.1,00,000/-, whichever is higher, need to be disclosed by way of notes. Till now any item exceeding 1 per cent of total revenue or R5000/-, whichever is higher, was to be shown as a separate head in P&L Account and should not have been combined under head “miscellaneous expenditure”.
23. Debit balance of Profit and Loss account should be shown as Negative figure under the head “surplus”, similarly the balance in “Reserve and surplus” after adjusting negative balance of surplus, if any, shall be shown under the head “Reserve and Surplus”, even if the figure is negative.
24. Gain or loss on foreign currency transactions and translations to be separated into Finance Costs and Other Expenses.
25. Reimbursement of expenses to auditors needs to be separately disclosed, previously it was not mandatory but Revised Sch-VI mandates for the same.
26. Prior period adjustments needs to be separately disclosed, and now it is mandated by Revised Sch-VI
27. In profit and Loss account, Revised Sch-VI requires the seperate disclosure of Incomes in respect of Revenue from Operations and Other Incomes. Revenue from operations to be shown as:sale of product(+) sale of services(+)Other Operating revenues (-)Excise duty (-)Special discounts.
28. Under the Head of “Other Incomes”, In Profit and Loss Account, Interest incomes, Dividend incomes, Net gain or loss on sale of investments, Sale of scrap and Other Non Operating incomes are to be separately disclosed.
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COMPILED BY K.SHASHIKUMAR. BCOM , ACA