Lecture24-24 - 21930 - 24-26 Final Accounts Revised Shcedule VI

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Format of Revised Schedule VI
Note As at 31 As at 31 March
Particulars
No. March 2012 2011
EQUITY AND LIABILITIES

Shareholders' Funds
Share Capital 1
Reserves and Surplus 2
Money received against Share Warrants
Share Application money pending allotment
Non-current Liabilities
Long-Terrn Borrowings 3
Deferred Tax Liabilities (Net)
Other Long Term Liabilities 4
Long-Terrn Provisions 5
Current Liabilities
Short-Term Borrowings 6
Trade payables
Other Current Liabilities 7
Short-Term Provisions 8
Total
ASSETS
Non-current Assets
Fixed Assets 9
Tangible Assets
Intangible Assets
Capital Work-in-progress
Intangible Assets under Development
Non-current Investments 10
Deferred Tax Assets (net)
Long·term Loans and Advances 11
Other Non-current Assets 12
Current Assets
Current Investments 13
Inventories 14
Trade Receivables 15
Cash and Bank Balances 16
Short-term Loans and Advances 17
Other Current Assets 18
Total
The notes referred to above form an integral part of the Financial Statements
Statement of Profit and Loss for the year ended 31 March 2012
Year Year
ended 31 ended 31
Note March March
Particulars No. 2012 2011
I. Revenue from Operations 19
II. Other Income 20
III. Total Revenue
IV. 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 21
Finance Costs 22
Depreciation and Amortization Expense
Other expenses 23
Total Expenses
V. Profit before Exceptional and Extraordinary items and Tax
VI. Add/(Less): Exceptional items
VII. Profit before Extraordinary items and Tax
VIII. Extraordinary Items
IX Profit before Tax
X Tax Expense:
Current tax / Current Tax (MAT)
Wealth tax
Deferred tax
Less: MAT credit entitlement
XI. Profit (Loss) for the period from continuing operations
XII. Profit/(Ioss) from discontinuing operations
XIII. Tax expense of discontinuing operations
XIV. Profit/(loss) from Discontinuing operations (after tax)
XV. Profit (Loss) for the period
Earnings per equity share (Face Value Rs. __/- each):
Basic
Diluted
Additional Information and Significant Accounting Policies 24
1. Notes on Financial Statements
Note 1: Share Capital Rs. Rs.
Authorised Share Capital
Equity Capital
______ Equity Shares of Rs.___ each xxxxxxx
______ Preference Shares of Rs. ___ each xxxxxxx
xxxxxxx
Issued Capital
______ Equity Shares of Rs. ___ each xxxxxxx
______ Preference Shares of ___ 100 each Xxxxxxx
xxxxxxx
Subscribed Capital
Subscribed and fully paid up
______ Equity Shares of Rs. ___each Xxxxxxx
______ Preference Shares of Rs. ____each Xxxxxxx
xxxxxxxx
Subscribed but not fully paid up
______ Equity Shares of ___ 10 each Xxxxxx
Less: Calls-in-Arrears xxxxxx xxxxxx
______ Preference Shares of ___ 10 each Xxxxxx
Less: Calls-in-Arrears xxxxxx xxxxxxx
xxxxxxx
Shares outstanding Equity Shares Preference Shares

Number Rs. Number Rs.
Shares outstanding at the beginning of the year
Shares Issued during the year
Shares bought back during the year
Shares outstanding at the end of the year
Current Year Previous Year

No. of No. of
Shareholder(s) holding more than 5% shares %of Holding %of Holding
Shares Shares
held held
Shares allotted for consideration other than cash (to be disclosed for period of five years
immediately preceding the Balance Sheet date)
Particulars Year (Aqqregate No. of Shares)
Particulars
2011-12 2010-11 2009-10 2008-09 2007-08
Equity Shares:
Fully paid up pursuant to contract(s)
without payment being received in cash
Shares bouqht back
Fully paid up by way of bonus shares
Preference Shares:
Fully paid up pursuant to contract(s)
without payment being received in cash
Shares bouqht back
Fully paid up by way of bonus shares
As at 31 As at 31
March March
Unpaid Calls 2012 2011
Rs. Rs.
By Directors
By Officers
As at 31 As at 31
March March
2. Reserves and Surplus 2012 2011
Rs Rs.
a. Capital Reserves
Opening Balance
(+) Current Year Transfer
(-) Written Back in Current Year
Closinq Balance
b. Capital Redemption Reserve
Opening Balance
Closinq Balance
c. Securities Premium Account
Opening Balance
Add Securities premium credited on Share issue
Less. Premium Utilised for various reasons
Premium on Redemption of Debentures
For Issuing Bonus Shares
Closinq Balance
d. Debenture Redemption Reserve
Opening Balance
Closing Balance
e. Revaluation Reserve
Opening Balance
Closing Balance
f. Share Options Outstanding Account
Opening Balance
Closinq Balance
g. Other Reserves (Specify the nature and purpose of each reserve)
Opening Balance
Closinq Balance
h. Surplus
Opening balance
(+) Net Profitl(Net Loss) For the current year
(+) Transfer from Reserves
(-) Issue of Bonus Shares
(-) Proposed Dividends
(-) Interim Dividends
(-) Transfer to Reserves
Closinq Balance
Total
As at 31 As at 31
4. Long Term Borrowings March 2012 March 2011
Rs. Rs.
Secured
(i) Bonds/debentures
___ (Previous Year: ___) ___ % Debentures of ,_ each redeemable at ___
on ____ by ___ )
(secured
(of the above Rs. __ is guaranteed by Directors and / or others)
Details of redeemed bonds/debentures which the company has power to
reissue:
(ii) Term loans
from banks
(secured by ___ )
from other parties
(secured by ___ )
Terms of Repayment ___
(iii) Deferred payment liabilities
(Secured by ___ )

(iv) Deposits
(Secured By ____)
(v) Loans and advances from related parties
(Secured By ___ )
(vi) Long term maturities of finance lease obligations
(Secured By ____)
(of the above, Rs. is guaranteed by Directors and / or others)
(vii) Other loans and advances (specify nature)
(Secured By _____)
(of the above Rs.__ is guaranteed by Directors and / or others)
In case of continuing default as on the balance sheet date in repayment of loans and interest with respect
to (ii)
A. Period of default
B. Amount
Unsecured
(i) Bonds/debentures
___ (Previous Year: ___) ___ % Debentures of Rs. each redeemable at ___
on ____
(of the above, Rs. is guaranteed by Directors and / or others)
Details of redeemed bonds/debentures which the company has power to
reissue:
(ii) Term loans
from banks
from other parties
(iii) Deferred payment liabilities
(of the above Rs.__ is guaranteed by Directors and / or others)
(iv) Deposits
(of the above Rs. is guaranteed by Directors and / or others)
(v) Loans and advances from related parties
(vi) Long term maturities of finance lease obligations
(vii) Other loans and advances (specify nature)
In case of continuing default as on the balance sheet date in repayment of loans and interest with respect
to (ii)
B. Amount
As at 31 As at 31
Other Long Term Liabilities
March March
2012 2011
Rs. Rs.
Trade Payables
Others
Total
As at 31 As at 31
March March
Long Term Provisions 2012 2011
Rs. Rs.
Provision for employee benefits
Superannuation (unfunded)
Gratuity (unfunded)
Leave Encashment (unfunded)
ESOP / ESOS
others (Specify nature)
Total
As at 31 As at 31
March March
Short Term Borrowings 2012 2011
Rs. Rs.
Secured
(i) Loans repayable on demand
from banks
(Secured By ____)
from other parties
(Secured By ____)
(of the above Rs. is guaranteed by Directors and I or others)
(ii) Loans and advances from related parties
(Secured By____)
(iii) Deposits
(Secured By ____)
(iv) other loans and advances (specify nature)
(Secured By ____)

In case of continuing default as on the balance sheet date in repayment of loans and interest with
respect to (i) (ii) & (iv)

B. Amount
Unsecured
(i) Loans repayable on demand
from banks
from other parties
(ii) Loans and advances from related parties
(iii) Deposits
(iv) other loans and advances (specify nature)
In case of continuing default as on the balance sheet date in repayment of loans and interest with
respect to (i) (ii)
B. Amount
Total
As at 31 As at 31
March March
other Current Liabilities 2012 2011
Rs. Rs.
Current maturities of long-term debt
Current maturities of finance lease obligations
Interest accrued but not due on borrowings
Interest accrued and due on borrowings
Income received in advance
Unpaid dividends
Application money received for allotment of securities and due for refund #
- interest accrued on (g) above
- Number of shares proposed to be issued:
- Amount of premium (if any):
- Terms and conditions of shares proposed to be issued:
- Date by which shares shall be allotted:
- Whether the company has sufficient authorized capital to cover the share
capital
shares outamount resulting
of such share from allotment
application money of
the period overdue from the last Date of allotment is , reason being ____
# All amounts out of Share Application money which are
refundable to be shown under this head (non-refundable portion
of share application money will form part of 'Share Application
Money Pending
Unpaid matured Allotment'
deposits (Balance
and interest accruedSheet))
thereon
Unpaid matured debentures and interest accrued thereon
Other payables (specify nature)
Total
As at 31 As at 31
March March
Short Term Provisions 2012 2011
Rs. Rs.
Provision for employee benefits
Salary & Reimbursements
Contribution to PF
Gratuity (Funded)
Leave Encashment (funded)
Superannuation (funded)
ESOP IESOS
others (Specify nature)
Total
Long Term Loans and Advances As at 31 March 2012 As at 31 March 2011
Long Term Loans and Advances
Rs. Rs. Rs. Rs.
Capital Advances
Secured, considered good
Unsecured, considered good
Doubtful
Less: Provision for doubtful advances
Security Deposits
Doubtful
Less: Provision for doubtful deposits
Loans and advances to related parties
Doubtful
Less: Provision for doubtful loans and advances
other loans and advances (specify nature)

Doubtful
Less: Provision for
Total
As at 31 As at 31
March March
Long Term Loans and Advances - Additional Disclosure 2012 2011
Rs. Rs.
Directors*
Other officers of the Company*
Firm in which director is a partner*
Private Company in which director is a member
*Either severally or jointly
other Non-Current Assets As at 31 March 2012 As at 31 March 2011

other Non-Current Assets
Rs. Rs, Rs. Rs.
Long term trade receivables (including trade
receivables on deferred credit
terms)
Doubtful
Less: Provision for doubtful debts
others (specify nature)

Doubtful
Less: Provision for
Debts due by related parties

Doubtful
Total
As at 31 As at 31
March March
Long Term Loans and Advances - Additional Disclosure 2012 2011
Rs. Rs.
Directors*
Inventories· As at 31 March 2012 As at 31 March 2011
Rs. Rs. Rs. Rs.
Raw Materials and Components (Valued at__ )
Goods-in transit
Work-in-progress (Valued at __ )
Goods-in transit
Finished Goods (Valued at __)

Goods-in transit
Stock-in-trade (Valued at __ )
Goods-in transit
Stores and spares (Valued at __ )

Goods-in transit
Loose Tools (Valued at__)

Goods-in transit
Others (Specify nature)

Total
As at 31 As at 31
March March
Trade Receivables 2012 2011
Rs. Rs.
Trade Receivables outstanding for a period less than six months from
the date they are due for payment
Unsecured, considered doubtful
Trade Receivables outstanding for a period exceeding six months from

the date they are due for payment
Unsecured, considered doubtful
Total
As at 31 As at 31
March March
Debts due by: 2012 2011
Rs. Rs.
Directors*
Total
As at 31 March
Cash and Bank Balances As at 31 March 2012
2011
Rs. Rs. Rs. Rs.
Cash on hand'
Cheques, drafts on hand
Balances with banks'
- Balances in short term accounts
- Earmarked Balances (eg/- unpaid dividend
accounts)
- Margin money
- Security against borrowings
- Guarantees
- Other Commitments
- Bank deposits with more than 12 months maturity
Others (specify nature)
Total
Repatriation restrictions, if any, in respect of cash and bank balances shall be separately
stated,
As at 31 March
Short-tenn Loans and Advances As at 31 March 2012
2011
Rs. Rs. Rs. Rs.
Loans and advances to related parties
Doubtful
Less: Provision for doubtful loans and advances
others (specify nature)

Doubtful
Less: Provision for
Total
As at 31 As at 31
March March
Debts due by: 2012 2011
Rs. Rs.
Directors*
Total
In case of company other than finance comapny
Year ended Year ended

31 March 31 March
2012 2011
Particulars
Rs. Rs.
Sale of products
Sale of services
Other operating revenues
Less: Excise duty
Total

31 March 31 March
2012 2011
Particulars
Rs. Rs.
Interest (Tax deducted at Source Rs............. Previous Year Rs.............. )
Other financial services
Total

31 March 31 March
2012 2011
other Income
Rs. Rs.
Interest Income (in case of a company other than a finance company) (Tax
deducted at Source Rs. .... Previous Year Rs. ..... )
Dividend Income
Net gain/loss on sale of Investments
Other non-operating income (net of expenses directly attributable to such
income)
Total
Year ended
Year ended 31
31 March
March 2011
2012
Employee Benefits Expense
Rs. Rs.
Salaries and incentives
Contributions to -
- Provident Fund
- Superannuation Scheme
- Gratuity Fund
Social security and other benefit plans for overseas employees
Expense on Employee Stock Option Scheme (ESOP) and Employee Stock Purchase
Plan (ESPP)
Staff Welfare Expenses
Total

31 March 31 March
2012 2011
Finance Costs
Rs. Rs.
Interest expense
Other borrowing costs
Applicable net gain/loss on foreign currency transactions and translation
Total

31 31
other Expenses March 2012 March 2011
Rs. Rs.
Consumption of stores and spare parts
Power and fuel
Rent
Repairs to buildings
Repairs to machinery
Insurance
Rates and taxes, excluding, taxes on income
Adjustments to the carrying amount of investments
Net gain or loss on foreign currency transaction and translation (other than considered as
finance cost)
Miscellaneous expenses
• Any item of income or expenditure which exceeds one per cent of the revenue from
operations or Rs. 100,000 whichever is higher;
Total
Additional information
31 31
Payments to the Auditor March 2012 March 2011
Rs. Rs.
a. As auditor
b. for taxation matters
c. for company law matters
d. for management services
e. for other services
f. for reimbursement of expenses
Total
Details of items of exceptional and extraordinary nature
In the case of manufacturing companies

a) Raw materials under broad heads
Year ended 31 Year ended 31
Particular March 2012 March 2011
Rs. Rs.
Raw Material 1
Raw Material 2
Others
Total
b) Goods purchased under broad heads

Rs. Rs.
Traded Item 1
Traded Item 2
Others
Total
cl Sales under broad heads

Sales for the Sales for the Closing Opening
Particular Year ended 31 Year ended 31 Inventory Inventory
Particular March
March 2012
2011
Rs. Rs. Rs Rs.
Manulactured Goods
Finished Goods 1
Finished Goods 2
Others
Total
Traded Goods
Traded Goods 1
Traded Goods 2
Others
Total
d) Work in Procress under broad heads

Rs. Rs.
Work in Progress Item 1
Work in Progress Item 2
Others
Total
In the case of Trading companies
a) Sales and Purchase under broad heads
Purchase lor Purchase lor
Sales lor the Sales lor the
Particular the the
31March 2012 31March 2011
31March 2012 31March 2011
Rs. Rs. Rs. Rs.
Traded Goods
Traded Goods 1
Traded Goods 2
Others
Total
In the case of Service companies
Service rendered under broad heads
31 31
Rs. Rs.
Service 1
Service 2
Others
Total
Major components of Deferred Tax Assets and Deferred Tax Liabilities:

As at 31 As at 31
March March
Particulars 2012 2011
Rs. Rs.
Deferred Tax Assets
Depreciation
Accrued employee costs
Provision for doubtful debts & advances
Leased Vehicles
Others
Deferred Tax Liabilities

Assets given on finance lease
Others
Net Deferred Tax Assets / Liabilities
Basic and diluted Earnings Per Share [EPS]

As at 31 As at 31
March March
Particulars 2012 2011
Rs. Rs.
Basic
Profit after tax as per accounts (Rs.)
Weighted average number of shares outstanding
Basic EPS (Rs.)
Diluted
Profit after tax as per accounts (Rs.)
Weighted average number of shares outstanding
Add: Weighted average number of potential equity shares on account of employee stock
options
Weighted average number of shares outstanding for diluted EPS
Diluted EPS (Rs.)

Face value per share (Rs.)
As at 31 As at 31
March March
Contingent Liabilities and Commitments (to the extent not provided lor) 2012 2011
Rs. Rs.
Contingent Liabilities
(A) Claims against the company not acknowledged as debt
(B) Guarantees
(C) Other money for which the company is contingently liable
Commitments
(A) Estimated amount of contracts remaining to be executed on capital account and not
provided for
(B) Uncalled liability on shares and other investments partly paid
(C) Other commitments (specify nature)
Total
Per share
Dividend on shares Total Rs.
Rs.
Dividends proposed to be distributed to equity shareholders
Dividends proposed to be distributed to preference shareholders
Arrears of fixed cumulative dividends on preference shares
Extraordinary Item
The revised Schedule requires ‘extraordinary items’ to be distinguished from ‘exceptional

items’ and shown separately on the face of the statement of profit and loss (with details
in notes). As per AS 5, such items are rare e.g., attachment of property, loss of property
due to earthquake.
Exceptional items
While the revised Schedule requires disclosure of a separate line item for exceptional
items on the face of the Statement (with details in notes), the term has not been defined.
Nor is this term defined in accounting standards. However, the term is generally
construed as referring to the items requiring disclosure under para 12 of AS 5, Net Profit
or Loss for the Period, Prior Period Items and Changes in Accounting Policies which reads
as under:
“ When items of income and expense within profit or loss from ordinary activities are of
such size, nature or incidence that their disclosure is relevant to explain the performance
of the enterprise for the period, the nature and amount of such items should be
disclosed separately.”
The revised Schedule requires a separate line for exceptional items to be disclosed before
‘Profit before extraordinary items and tax’. However, as per AS 5:
12. ……. the nature and amount of such items should be disclosed separately.
13. …… Disclosure of such information is sometimes made in the notes to the financial statements.’
Thus, as per AS 5, exceptional items are either disclosed as a separate line

item(s) on the face or included in the relevant line item and explained by way
of notes to the financial statements. Does this mean that since the revised
Schedule gives primacy to the requirements of an accounting standard,
companies can continue to follow the disclosure requirements of AS 5? This
is not so. Considering the specific requirements of the revised Schedule,
companies no longer have the option to not disclose exceptional items as a
separate line on the face of the statement of profit and loss. It may be noted
that the standards will prevail only if there is a conflict between the
requirements of a standard and the revised Schedule. However, the given
case is not that of a conflict but one of elimination of an option.
Thus, the exceptional items should be disclosed separately on the face of the
Statement as a separate line item, with the details disclosed in the Notes
(where there is more than one such item).
Treatment of Various Items under Revised Schedule VI of the Companies Act, 1956
IMPORTANT NOTE
Detail of each entry (item) in the Balance Sheet and Statement of Profit and Loss is to be given
by way of note and only amount will appear against the entry in the Balance Sheet. For
example: A company has issued both Equity Share Capital and Preference Share Capital.
Amount for Equity Share Capital and Preference Share Capital will be shown separately in the
Notes to Accounts for Share Capital and the total of Subscribed Capital will be shown as one
amount against the entry (Share Capital) in the Balance Sheet.
Share Capital:
Share Capital is shown under the head Shareholders’ Fund. It is further sub-classified as following on the
face of the balance sheet;
- Share Capital
- Reserves and Surplus
- Money Received against Share Warrants.
Following details to be disclosed under the Notes to Accounts.
- Different class of Share Capital are shown separatelyin the Notes to Accounts. For example a
company has issued 10,000, Equity Shares of Rs. 10 each and 5,000, 11%Preference Shares of
Rs. 100 each. Both the shares are fully paid up. These two shares would be disclosed as two
separate classes of shares.
- Following further information for each class of shares is disclosed:
o AuthorisedShare Capital;
o Issued Share Capital;
o Subscribed Share Capital. It is classified into
Subscribed and fully paid; and
Subscribed but not fully paid.
- Par value of share is also disclosed.
How Share capital is shown is explained in the following examples.
Example 1:
AB Ltd. has an authorised capital of Rs. 5,00,000 divided into 50,000 equity shares of Rs. 10 each.
It issued 10,000 Equity Shares of Rs. 10 each at par. All the shares were subscribed for and the due
amount was received.
How will be Share Capital shown in the Balance Sheet of the company?
Balance Sheet of ….
as at ….
Particulars Note No. Rs.

1. Equity and Liabilities
Shareholders Fund
Share Capital 1. 1,00,000
Notes to Account:
Note 1: Share Capital Rs.
Equity Capital
50,000 Equity Shares of Rs.10 each 5,00,000

Issued Capital
10,000 Equity Shares of Rs. 10 each 1,00,000
Subscribed Capital
10,000 Equity Share of Rs. 10 each 1,00,000
Example 2:
Grand Ltd. has an authorised capital of Rs. 5,00,000 divided into 30,000 equity shares of Rs. 10 each and
2,000 Preference Shares of Rs. 100 each.
It issued 10,000 Equity shares and also 2,000 Preference Shares at par.
All shares offered were subscribed for and the money was duly received except final call of Rs. 3 per
equity shares on 500 shares.
Solution:
as at ….
Shareholders Fund
Notes to Accounts:
Note 1: Share Capital Rs. Rs.

Equity Capital
30,000 Equity Shares of Rs.10 each 3,00,000
2,000 Preference Shares of Rs. 100 each 2,00,000
5,00,000
Issued Capital
3,00,000
Subscribed Capital
9,500 Equity Shares of Rs. 10 each 95,000
2,95,000
500, Equity Shares of Rs. 10 each 5,000
Less: Calls-in-Arrears 1,500 3,500
2,98,500
Example 3:
Matrix Ltd. is registered with an authorised capital of Rs. 5,00,000 divided into 50,000 equity shares of Rs.
10 each.
It issued 10,000 equity shares of Rs. 10 each at par. Final call of Rs. 2 per share was yet to be called.
All shares offered were subscribed for and the money was duly received.
Solution:
as at ….

Shareholders Fund
Share Capital 1. 80,000
Notes to Accounts
Note 1
Share Capital Rs.

Equity Capital
Issued Capital
Subscribed Capital 80,000
Example 4:
JBM Ltd. is registered with an authorised capital of Rs. 5,00,000 divided into 50,000 equity shares of Rs.
10 each.
It issued 10,000 equity shares of Rs. 10 each at par.
Calls were made of Rs. 8 per share. All shares offered were subscribed for and the money was duly
received except final call of Rs. 3 on 500 shares.
Solution:
as at ….

Shareholders Fund
Share Capital 1. 78,500
Note to Account
Share Capital Rs. Rs.

Equity Capital
Issued Capital
Subscribed Capital
10,000, Equity Shares of Rs. 10 each; Rs. 8 Called up 80,000
Less: Calls-in-Arrears 1,500 78,500
Example 5:
M Ltd. has an authorised capital of Rs. 5,00,000 divided into 50,000 equity shares of Rs. 10 each.
The company has existing issued and fully paid 15,000 shares of Rs. 10 each, which were issued as
consideration for purchase of building.
It further issued 10,000 equity shares of Rs. 10 each at par. The money called was Rs. 8 per share. All
shares were subscribed for and the money was duly received except final call of Rs. 3 per share on 1,000
shares.
Solution:
as at ….

Shareholders Fund
Notes to Accounts
Note 1:

50,000 Equity shares of Rs. 10 each 5,00,000
Issued Capital
25,000 Equity Share of Rs. 10 each 2,50,000
Subscribed Capital
Subscribed and Fully Paid up
15,000, Equity Shares of Rs. 10 each 1,50,000
(Above shares have been issued for consideration other
than cash)
10,000, Equity Shares of Rs. 10 each; 8 Called up 80,000
Less: Calls-in-arrears 3,000 77,000
2,27,000
Example 6:
Casio Ltd. is registered with the capital: 1,00,000, Equity Shares of Rs. 10 each; and 50,000, 9%
Preference Shares of Rs. 10 each.
It issued 90,000 Equity Shares and 50,000, 9% Preference Shares for subscription.
85,000 Equity Shares were subscribed on which the company had called Rs. 8. It did not receive first call
of Rs. 2 on 3,000 shares, out of which 2,000 allotted to Atul were forfeited. Out of the forfeited shares
1,500 shares were reissued at Rs. 6, Rs. 8 paid up.
9% Preference Shares were fully paid up.
How will it be shown in balance sheet as per Revised Schedule VI?
Solution:
as at ….

Shareholders Fund
Notes to Accounts
Note 1:

1,00,000 Equity shares of Rs. 10 each 10,00,000
Preference Share Capital
50,000, 9% Preference Shares of Rs. 10 each 5,00,000 15,00,000
Issued Capital
50,000, 9% Preference Shares of Rs. 10 each 5,00,000 14,00,000
Subscribed Capital
Subscribed and Fully Paid up
50,000, 9% Preference Shares of Rs. 10 each 5,00,000
Subscribed and not Fully Paid up
Less: Calls in Arrears (1,000 Share × Rs. 2) 2,000
6,74,000
Add: Forfeited Share Account 3,000 6,77,000
11,77,000
WRITING OFF OF PRELIMINARY EXPENSES, DISCOUNT ON ISSUE OF SHARES AND DICOUNT

(LOSS) ON ISSUE OF DEBENTURES
Preliminary Expenses and Deferred Revenue Expenditure is written off in the year in which they are
incurred either
from Securities Premium Reserve; or
from the Statement of Profit and Loss.
Discount on Issue of Shares and Share Issue Expenses

It is written off either
(i) from Securities Premium Reserve (permitted u/s 78 of the Companies Act, 1956); or
(ii) from the Statement of Profit and Loss over the period of 3 to 5 years.
Revised Schedule VI requires that all assets shown in the Balance Sheet should be classified into Non –
current Assets and Current Assets. Accordingly, Discount on Issue of Shares or Share Issue Expenses not
yet written off are to be classified as Non – current Assets and Current Assets.
Discount on Issue of Shares or Share Issue Expenses that shall be written off after 12 months of the date
of Balance Sheet shall be shown as Other Non – current Assets under Non – current Assets and the
amount to be written off within 12 months from the date of Balance Sheet shall be shown as Other Current
Asset under Current Assets.
Discount or Loss on Issue of Debenture

It is written off either
(i) from Securities Premium Reserve (permitted u/s 78 of the Companies Act, 1956); or
(ii) from the Statement of Profit and Loss over the period of the loan i.e. Debenture.
Revised Schedule VI requires that all assets shown in the Balance Sheet should be classified into Non –
current Assets and Current Assets. Accordingly, Discount on Issue of Shares or Share Issue Expenses not
yet written off are to be classified as Non – current Assets and Current Assets.
Discount or Loss on Issue of Debentures that shall be written off after 12 months of the date of Balance
Sheet shall be shown as Other Non – current Assets under Non – current Assets and the amount to be
written off within 12 months from the date of Balance Sheet shall be shown as Other Current Asset under
Current Assets.
Current Assets: All assets are divided into Non-Current Assets and Current Assets.
According to the Revised Schedule VI an asset shall be classified as current if it satisfies any one of the
following criteria;
a. it is expected to be realised in, or is intended for sale or consumption in, the company’s normal
operating cycle.
b. It is held primarily for the purpose of being traded
c. It is expected to be realised within 12 months after the reporting date or
d. It is cash or cash equivalent unless it is restricted form being exchanged or used to settle a liability
for at least 12 months after the reporting date.
Non – current Assets: All other assets shall be classified as non-current assets.
Operating Cycle: Operating Cycle means the time between the acquisition of assets for processing and
their realisation in cash or cash or cash equivalent.
Current Assets required to be classified into the following categories on the face of the balance sheet:
a. Current investments
b. Inventories
c. Trade receivables
d. Cash and cash equivalents.
e. Short-term loans and advances
f. Other current assets
It is important to note that Inventory includes Raw Materials, Work in Progress, Finished Goods, Stock in
Trade (Trading Goods), Store and Spares, Loose Tools.
Appropriation of Profit:
Appropriation is to be made through the Balance of Statement of Profit and Loss as follows;
- Profit for the accounting period is transferred and added to the existing balance of Statement of
Profit and Loss under Reserve and Surplus.
- Thereafter appropriation for transfer to reserves and proposed dividend etc. is made as follows:
Opening Balance xxx

Add: Profit (Loss) for the Year Xxx
xxx
Less Appropriations to
DDR xxx
Workmen Compensation Reserve xxx
Proposed Dividend xxx
Balance xxx
Let us take few examples for better understanding.
Example 1:
A company has an opening credit balance in Statement of Profit and Loss of Rs. 1,00,000. During the year,
it earned a profit of Rs. 1,50,000.
Questions:
(i) How will it be shown in the Balance Sheet?
(ii) What amount will be shown therein?
Solution:
1. Balance of Statement of Profit and Loss will be shown under Reserves and Surplus.
2. The amount shown will be:
Statement of Profit and Loss
Rs.
Balance – Statement of Profit and Loss
Opening 1,00,000
Add: Profit for the Period 1,50,000
Balance (to be shown in Balance Sheet) 2,50,000
Question 2:
A company has a opening credit balance in Statement of Profit and Loss of Rs. 1,00,000. During the year,
it incurred loss of Rs. 1,50,000.
Questions:
(i) How will you show the balance of Statement of Profit and Loss in the Balance Sheet?
Solution:
1. Balance of Statement of Profit and Loss will be shown under Reserves and Surplus as a negative
amount.
2. The amount shown will be:
Rs.
Statement of Profit & Loss (Opening) 1,00,000
Add: Profit (Loss) for the Period (1,50,000)
Balance (to be shown in Balance Sheet) (50,000)
Example 3:
A company has an opening debit balance in Statement of Profit and Loss of Rs. 1,00,000. During the year,
it incurred a loss of Rs. 1,50,000.
Questions:
(i) How will you show the balance in Statement of Profit and Loss in financial statements?
Solution:
(i) Balance of Statement of Profit and Loss will be shown under Reserves and Surplus as a
negative amount.
(ii) The amount shown will be:
Rs.
Statement of Profit & Loss (Opening) (1,00,000)
Add: Profit (Loss) for the Period (1,50,000)
Balance (to be shown in Balance Sheet) (2,50,000)
Example 4:
A company has a opening credit balance in Statement of Profit and Loss of Rs. 1,00,000. During the year,
it earned a profit of Rs. 75,000. It decided to transfer Rs. 15,000 to Debenture Redemption Reserve (DRR)
and also proposed to pay dividend of Rs. 25,000.
Question:
How will you show the appropriations in the financial statements?
Solution:
It will be shown in the Note on Reserves and Surplus as follows:
Statement of Profit and Loss Rs. Rs.

Statement of Profit & Loss (Opening) 1,00,000
Add: Profit (Loss) for the Period 75,000
Balance (to be shown in Balance Sheet) 1,75,000
Less: Appropriation
Proposed Dividend 25,000
Transfer to DDR 15,000 40,000
Balance 1,35,000
Debenture Redemption Reserve
Rs.
Opening Balance Nil
Transfer form Balance in Statement of Profit and Loss 15,000
Balance 15,000
Reserves and Surplus to be shown on the face of the Balance Sheet (Rs. 1,35,000 + Rs. 15,000) i.e. Rs.
1,50,000
Current Liabilities
Short – term Provisions
Proposed Dividend Rs.25,000
Example 5:
A company has opening credit balance in Statement of Profit and Loss of Rs. 1,00,000. During the year, it
incurred loss of Rs. 1,50,000. It has an opening balance in Debenture Redemption Reserve of Rs. 60,000.
Question:
How will you show the two in the financial statements?
Solution:
Reserves and Surplus
Rs.
Debenture Redemption Reserve (DRR)
Opening Balance 60,000
Statement of Profit and Loss (Opening) 1,00,000
Add: Profit for the Period (1,50,000)
Balance (10,000)
Amount to be shown under

Reserves and Surplus 10,000
Example 6:
A company has opening debit balance in Statement of Profit and Loss of Rs. 1,00,000. During the year, it
earned a profit of Rs. 3,00,000. It decided to transfer Rs. 50,000 to Debenture Redemption Reserve (DRR)
and also proposed to pay dividend of Rs. 25,000.
Question:
How will you show them in the financial statements?
Solution:
Reserves and Surplus
Statement of Profit and Loss Rs. Rs.

Statement of Profit and Loss (1,00,000)
Add: Profit (Loss) for the Period 3,00,000
Balance 2,00,000
Less: Appropriations
Transfer to DRR 50,000
Proposed Dividend 25,000 75,000
Balance – Statement of Profit and Loss 1,25,000
Debentures Redemption Reserve (DRR)
Opening Balance Nil

Transfer from Statement of Profit and Loss 50,000
50,000
Balance – Reserves and Surplus 1,75,000
Current Liabilities Rs.

Short – Term Provisions
Proposed Dividend Rs. 25,000

Lecture24-24 - 21930 - 24-26 Final Accounts Revised Shcedule VI

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Format of Revised Schedule VI

EQUITY AND LIABILITIES

Shares outstanding Equity Shares Preference Shares

Current Year Previous Year

other loans and advances (specify nature)

other Non-Current Assets As at 31 March 2012 As at 31 March 2011

others (specify nature)

Debts due by related parties

Finished Goods (Valued at __)

Stores and spares (Valued at __ )

Loose Tools (Valued at__)

Others (Specify nature)

Trade Receivables outstanding for a period exceeding six months from

others (specify nature)

In case of company other than finance comapny

Year ended Year ended

Year ended Year ended

Year ended Year ended

Year ended Year ended

Year ended Year ended

Details of items of exceptional and extraordinary nature

In the case of manufacturing companies

b) Goods purchased under broad heads

cl Sales under broad heads

d) Work in Procress under broad heads

Major components of Deferred Tax Assets and Deferred Tax Liabilities:

Deferred Tax Liabilities

Net Deferred Tax Assets / Liabilities

Basic and diluted Earnings Per Share [EPS]

Diluted EPS (Rs.)

The revised Schedule requires ‘extraordinary items’ to be distinguished from ‘exceptional

Thus, as per AS 5, exceptional items are either disclosed as a separate line

Following details to be disclosed under the Notes to Accounts.

How Share capital is shown is explained in the following examples.

Particulars Note No. Rs.

50,000 Equity Shares of Rs.10 each 5,00,000

Note 1: Share Capital Rs. Rs.

Particulars Note No. Rs.

Share Capital Rs.

Particulars Note No. Rs.

Share Capital Rs. Rs.

Particulars Note No. Rs.

Share Capital Rs. Rs.

Particulars Note No. Rs.

Share Capital Rs. Rs.

WRITING OFF OF PRELIMINARY EXPENSES, DISCOUNT ON ISSUE OF SHARES AND DICOUNT

from Securities Premium Reserve; or

from the Statement of Profit and Loss.

Discount on Issue of Shares and Share Issue Expenses

Discount or Loss on Issue of Debenture

Opening Balance xxx

Let us take few examples for better understanding.

It will be shown in the Note on Reserves and Surplus as follows:

Statement of Profit and Loss Rs. Rs.

Debenture Redemption Reserve

How will you show the two in the financial statements?

Reserves and Surplus

Amount to be shown under

Reserves and Surplus

Statement of Profit and Loss Rs. Rs.

Debentures Redemption Reserve (DRR)