DEPRECIATION

A S PE R CO MPA NY ACT 20 13
Company Act
•Companies Act -1956

Companies Act 2013

Companies Act, 1956
“Financial Year” means, in relation to any
body corporate, the period in respect of
which any profit and loss account of the
body corporate laid before it in annual
general meeting is made up, whether that
period is a year or not:
Companies Act, 2013
“Financial Year” means in relation to any
company or body corporate, means the
period ending 31st day of the March every
year, and where it has been incorporated on
or after the 1st day of January of a year, the
period ending on 31st day of march of the
following year, in respect where of financial
statement of the company or body corporate
is made up.
• While discussing the new provisions under Companies Act 2013
regarding preparation of Financial statements, we will cover
• Books of accounts
• Depreciation
• Financial statements
• Consolidated Financial Statements
• Directors Report

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Financial Statement in relation of Company Act.
Balance Sheet

•Its prepared at end of the finance to know the financial position of company

Profit & Loss A/c

•Its prepared at end of the finance to know the actual profit & loss of company.

Cash Flow Statement

•Its prepared to know the cash positon of the company

Statement of Changes in Equity

•The change in owners' equity over an accounting period by presenting the movement in reserves comprising the
shareholders' equity.

Explanatory Note/Notes to Account

•Attaching the forming part of any document in sub clause of (a) or sub clause of (b)

The financial statement in respect to one Person , Small Scale Industries or Dormant Company may not required to
prepared cash flow statement
Overview of Company
Overview of Company
• A. Following AS are applicable to all companies, without exception:
• AS-1 Disclosure of Accounting Policies
• AS-2 Valuation of Inventory
• AS-4 Contingencies and Events occurring after Balance sheet date
• AS-5 Net Profit or Loss for the period. Prior period items and changes in Accounting
policies
• AS-6 Depreciation Accounting

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• AS-7 Construction Contracts
• AS-9 Revenue Recognition
• AS-10 Accounting for Fixed Assets
• AS-11 The effects of changes in Foreign exchange Rates
• As-12 Accounting for Government grants
• AS-13 Accounting for Investments
• AS-14 Accounting for Amalgamations
• As-16 Borrowing costs
• AS-18 Related Party Transactions

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• As-22 Accounting for taxes on Income
• As-24 Discontinuing operations
• As-26 Intangible Assets

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• B. At present, following AS are applicable to companies only if, the preparation of
consolidated FS/Interim FS are either mandatory or these companies voluntary
chooses to do so. However, till the time IND AS are notified, companies required to
prepare consolidated FS would have to follow;
• AS- 21ConsolidatedFinancial Statements
• As-23 Accounting for investments in Associates
• AS-27 Financial Reporting of Interest in Joint Ventures
• AS-25 Interim Financial Reporting

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• Following standards are not applicable Small & Medium Sized Companies in its entirety:
• AS-3 Cash Flow
• AS-17 Segment Reporting
• SMC as per Accounting Standard Rules 2006 are the companies:
• a. Whose equity or debt securities are not listed on any stock exchange or are not in process
of listing.
• b. which is not a bank, financial institution or an insurance company.

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• c. Whose turnover excluding other income does not exceed Rs.50 Crore in
immidiately preceding previous year.
• d. which does not have borrowings including public deposits in excess of Rs.10 Crore
• e. which is not a holding or subsidiary of a company which is not SMC

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• D. Following Standards are applicable to SMCs with certain exemptions

Accounting Standard Exemption paragraphs

AS-15 Employee Benefits Para 11 t0 16
Para 46 and 130
Para 50 to 116
Para 117 to 123
Para 129 to 131
AS-19 Leases Para 22©, (e) and (f)
Para 25(a),(b) and (e)
Para 37(a) and (f)
Para 46(b) and (d)
AS -20 Earnings per share Disclosure of Diluted earning

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Features of Financial Presentation
• Going Concern
• Fair Presentation
• Aggregation –[Similar Transactions]
• Frequency – Annually
• Accrual Basis
• Consistency
• Matching Concept
2013
• Comparatives
2014

2015
Instruction For Preparing
Reserve and Surplus
(i)Reserves and Surplus shall be classified as
(a) Capital Reserves
(b) Capital Redemption Reserves
(C) Securities Premium Reserves
(d) Debenture Redemption Reserves
(e) Share Options Outstanding Account
(f) Other Reserves
(g) Surplus
(h) Revaluation Reserves
Instruction For Preparing
(ii) A reserve specifically represented by earmarked
investments shall be termed as a “Fund”.
(iii) Debit balance of statement of profit and loss shall
be shown as a negative figure under the heads
“Surplus”, after adjusting negative balance of
surplus, if any, shall be shown under the head
“Reserve and “Surplus”
Instruction For Preparing
Long-Term Borrowings
(i) Long-Term Borrowings shall be classified as
(a) Bonds/Debentures
(b) Term Loans
(c) From Banks
(d) From other parties
(e) Deposits
(f) Deferred Payment Liabilities
(g) Loans and Advance for related parties.
(h) Other loans and Advances (specify nature)
Instruction For Preparing
Other long-term liabilities
(a) Trade Payables
(b) Others
Long-Term Provisions
The amount shall be classified as
(a) Provision for employee benefits
(b) Others
Instruction For Preparing
Short-Term Borrowings
(i) Short-term borrowings shall be classified as
(a) Loans repayable on demand;
(1) From Banks
(2) From other parties
(b) loans and Advances from related parties
(c) Deposits
(d) Other loans and advances
Instruction For Preparing
Tangible Assets
(i) Classification shall be given as;
(a) Land
(b) Buildings
(c) Plant and Equipment
(d) Furniture and Fixtures
(e) Vehicles
(f) Office Equipment
(g) Others
Instruction For Preparing
Intangible Assets
(i) Classification shall be given as;
(a) Goodwill
(b) Brands/Trademarks
(c) Computer Software
(d) Mastheads and publishing titles
(e) Mining right
(f) Copyright
(g) Licenses and Franchise
(h) Others
Cash Flow Statement
A S PE R CO MPA NY ACT
Ratio Analysis
NO MINATOR & D E NO MINATO R NU MB ER
Classification of Ratio