COMPANY FINAL ACCCOUNTS

Introduction:
There is no legal obligation for sole proprietorship and a partnership firm to prepare final accounts, but companies have
statutory obligations to keep proper books of accounts and to prepare its final accounts every year in the manner as prescribed
in the Companies Act. Chapter IX, Sections 128 to 138 of the Companies Act, 2013 deals with the legal provisions relating to the
Accounts of Companies. These sections including Schedule II and III were brought into force from 1st April 2014. The relevant
rules pertaining to these provisions have also been notified. All these relevant provisions/schedules and rules are applicable for
the financial years commencing on or after 1st April 2014.

Schedule III of The Companies Act, 2013:

According to Section 129 of the Companies Act, 2013, all the companies registered under this Act will have to present its
financial statements in Schedule III of the Act. The Schedule III of the Companies Act, 2013 has been formulated to keep pace
with the changes in the economic philosophy leading to privatization and globalization and consequent desired changes/reforms
in the corporate financial reporting practices. It deals with the Form of Balance Sheet, Statement of Profit and Loss, and
disclosures to be made therein, and it applies uniformly to all the companies registered under the Companies Act, 2013, for the
preparation of financial statements of an accounting year.

Presentation of Balance Sheet

A Balance Sheet is a statement of the financial position of an enterprise as at a given date, which exhibits its assets, liabilities,
capital, reserves and other account balances at their respective book values.
EXCEPTIONAL ITEMS:
Exceptional items are defined as those items that in management’s judgment are material items which derive from events or
transactions that fall within the ordinary activities of the Group and which individually or, if of a similar type, in aggregate, need
to be disclosed by virtue of their size or incidence.
Examples of Exceptional items:
• Profit or loss arises on disposal of fixed asset.
• Abnormal losses on long term contract.
• Amount received in settlement of insurance claims
• Write off of eexpenditure capitalized on intangible assets other than amortisation

EXTRA ORDINARY ITEMS:

AS 5 “Net Profit or Loss for the period, Prior period items and changes in Accounting Policies” defines ‘extraordinary items’ as:
‘Extraordinary items are
income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise
and, therefore, are not
expected to recur frequently or regularly.
Examples of Extraordinary items:
• Sale of an investment in subsidiary and associated companies;
• Significant charge in Government fiscal policy;