SEMINAR ON

ACCOUNTING
THEORY AND
PRACTICE
Submitted to Prof. Meena Sharma
TABLE OF CONTENTS

01 Introduction 02 Published accounts

03 components 04 Recent trends

Recent trends in the presentation of
corporate published accounts

Presented by: Sanskriti

01 Introduction
In India every company has to present its financial
statements in the form and contents as prescribed under
section 129 of the companies Act, 2013. Keeping in view the
complicacies of statutory forms in the Companies Act, now-a-
days it is common practice to add the Statement of profit &
loss and balance sheet drawn in statutory forms, some
voluntary supplementary information in a simple manner as
would be easily understood by a layman.
 Published
02 accounts
Meaning and introduction
The published accounts are the financial statements that every
limited company has to issue annually.
 Limited companies are legally obliged to lodge a report and
accounts with Companies House (the government body
responsible for overseeing and managing limited companies)
annually and these are available for anyone to access.
The accounts of a company are published to give greater
publicity to the company and to enable the members, investors
and public at large to understand the profitability and financial
positions of the concern.
Section 209 of the Indian Companies Act requires a company to keep proper books
of accounts with respect to the following:
(a) All sums of money received and expended by the company and the matter in
respect of which the receipt and expenditure take place i.e., cash book.
(b) All sales and purchases of goods by the company i.e., day books.
(c) The assets and liabilities of the company i.e., a ledger.
(d) In the case of a company engaged in production, processing manufacturing or
mining activities such particulars relating to utilization of material or labor or other
item of cost as may be prescribed if such class of companies is required by the Central
Government to include such particulars in the books of accounts.
Objectives of published accounts:

GIVE INFORMATION ABOUT:

1. About performance of company.

2. About problems faced by company.
3. About sources of application of funds.
4. About products of a company.
Need of presenting published accounts:

1.Profit utilization
2.Profit quality
3.Balance sheet strength
4.Trends with time
 Components of
03 Published account
1. Annual Accounts and Balance Sheet:
The annual accounts of a company consist of profit and loss account and a balance sheet.
The balance sheet of a company must give a true and fair view of the affairs of the company
as at the end of a financial year. The Banking and Insurance companies have been
exempted from these provisions because separate forms have been prescribed by the Acts
of such companies.
2. Profit and Loss Account:
Section 211 of the Companies Act requires that profit and loss account of a company
must give a true and fair view of the profit or loss of the company for the financial year.
Profit and loss account must comply with the requirements of Part II of Schedule VI-.
 ■ The profit and loss account shall set out various items in some convenient form
and shall cover the following information:
■ (a) The aggregate amount of sales effected by the company.
■ (b) Commission paid to sole selling agents within the meaning of section 294 of the
Act.
■ (c) Commission paid to other selling agents.
■ (d) Brokerage, discount on sales, other than the usual trade discount.
3. Board of Director Report:
■ As per section 217 there must be attached with every balance sheet a report by its
Board of Directors.
■ The report shall deal with the following:
■ (a) The state of company’s affairs.
■ (b) The amount if any which it proposes to carry to any reserves in the balance sheet.
■ (c) The amount which it recommends for payment as dividend.
■ (d) Any material changes and commitments, if any, affecting the financial position of
the company which have occurred between the end of financial year to which the
balance sheet relates and the date of the report.
■ (e) Conservation of energy, technology absorption, foreign exchange earnings and
outgo. These details should be submitted in prescribed form
 Recent trends in presentation of
03 corporate published accounts
■ Basically there are two types of disclosure in the presentation of published accounts:
■ Mandatory disclosures
■ Voluntary disclosures

■ Mandatory disclosures are those which are legally required to be disclosed in corporate
annual reports as per the provisions of Companies Act 1956 and its various amendments

■ Voluntary disclosures are those that are not mandatory but these items are voluntary
disclosed by these companies in their annual reports which are deemed to be relevant for
interested parties.
■ Mandatory disclosure/trends:
■ Revised Schedule
■ Report on corporate governance
■ Financial statement as per IFRS
■ Business responsibility report
■ CSR
■ Environmental protection
■ Account for intangible assets
■ Voluntarily disclosure/trends:
■ Human resource management
■ Value added statement
■ Core values of the companies
■ Code of conduct
■ Client engagement
■ Triple bottom line
■ Integrated reporting
■ Sustainability reporting
■ Inclusive growth
Mandatory
trends:
CORPORATE SOCIAL
RESPONSIBILITY REPORTING:
■ CSR is a management concept where the companies integrate the social and economic
concerns in their business operations and interactions with their stakeholders.
■ Rule 8 of CSR rules provides that the companies upon which CSR rules are applicable
on or after 1 April 2014, shall be required to incorporate in the Board’s report or
annual report on CSR containing the following particulars:
■ Brief outline on the company’s CSR policy, including overview of projects.
■ Composition of CSR committee.
■ Average net profit of the company in last 3 years.
■ Details of CSR expenditure in the financial year(2% of the net profit)
■ If company failed to spend 2% of NP, then reasons thereof behind it.
■ SOURCE: HDFC final reports for FY22
 BUSINESS RESPONSIBILITY REPORTING:

■ It refers to the practice of disclosing company’s efforts and performance in the areas of social and
environmental responsibility.
■ It involves providing information on the company’s sustainability initiatives, ethical practices,
community engagement and environmental impact.
■ It typically includes disclosures on topics such as carbon emissions, waste management, employee
welfare, supply chain practices.
■ One example of business responsibility reporting is the annual sustainability report published by
Coca-Cola. In their report, Coca-Cola discloses their efforts and progress in areas such as water
stewardship, packaging sustainability, community engagement, and responsible marketing
practices. They provide detailed information on their environmental initiatives, social programs,
and governance practices. This report allows stakeholders to understand Coca-Cola's commitment
to sustainability and responsible business practices.
■ Source: HDFC final
Reports for FY22
Revised schedule 6:
When it comes to the presentation of corporate
published accounts, the revised Schedule 6 is
actually a part of the companies Act in India. It
provides guidelines for the format and content of
financial statements. It helps ensure uniformity
and comparability in Financial reporting. The
revised schedule prescribes a vertical format for
presentation of balance sheet therefore, no option
is there to prepare financial statements in
horizontal form.
Corporate governance report:
The corporate report should include
a statement of disclosures of the
company’s governance procedures
and compliance. It should also
disclose the principles and codes
that guide the company’s
procedures. Example: Risk
management, executive
compensation, code of ethics.
Voluntarily
trends:
TRIPPLE BOTTOM LINE REPORTING:

■ It is an economic concept
■ This concept came in existence due to increasing awareness of social and
environmental issues.
■ The firm should not only focus on the profit maximization, it should equally be
concerned about the society and environment.
■ A company must focus on 3P’s- profit, people and the planet.
■ Therefore, it refers to the production of economic, social and environmental
information in an integrated manner that reflects activities and outcomes across these
three dimensions of the company’s performance.
SUSTAINABILITY REPORTING:

■ Sustainability reporting is the disclosure and communication of environmental, social

and governance (ESG) goads- as well as company’s progress towards them.
■ . It allows companies to showcase their environmental initiatives, social impact, and
governance practices, such as diversity and transparency.
■ There are several common frameworks for sustainability reporting:
■ 1, Global reporting initiative(GRI): reporting on wide range of sustainability topics,
including environmental impacts, labor practices, human rights, and product
responsibility.
■ 2. Sustainability Accounting Standards Board (SASB):
SUSTAINABILITY REPORTING:

■ It focuses on industry-specific sustainability topics and provides standardized metrics

and disclosure recommendations for companies in various sectors.
■ 3.The Task Force on Climate-related Financial Disclosures (TCFD) :is another
important framework, which helps companies disclose climate-related risks and
opportunities in their financial filings. It aims to promote consistent and decision-
useful climate-related financial disclosures.
■ Many companies have embraced sustainability reporting frameworks to enhance their
transparency and accountability. Here are some examples:

■ 1. Unilever: Unilever, a multinational consumer goods company, uses the Global

Reporting Initiative (GRI) framework to report on its sustainability performance. They
disclose information on various topics like climate change, waste management, and
social impact.

■ 2. Nestlé: Nestlé, a leading food and beverage company, follows the Sustainability
Accounting Standards Board (SASB) framework. They report on sustainability aspects
specific to their industry, such as water management, responsible sourcing, and nutrition.
Value added statement & HRM:
■This statement shows how much value on their financial performance. They are
was generated through various activities now providing more detailed information
such as production, distribution, and about their HR strategies, employee
financing. It helps stakeholders benefits, and training programs in their
understand how the company contributes corporate accounts.
to the economy and how value is
distributed among different stakeholders.
It's a great way to showcase the
company's overall performance and its
impact on society.
■Companies are recognizing the value of
their workforce and the impact of it has
INTEGRATED REPORTS:

■ It refers to the practice of involving both financial and non financial information in a company’s
annual reports.
Framework: Integrated reporting council(IIRC).
It provides guidance on how to structure and present integrated reports, emphasizing the
connectivity between financial and non financial information. By including non financial
information in their published accounts companies can showcase their commitment to
sustainability and transparency.
■ Integrated reporting typically covers a wide range of topics, including financial performance,
environmental impacts, social initiatives, governance practices, and risk management. It allows
companies to demonstrate how they create value over time and how they are managing their
resources and relationships to achieve sustainable outcomes.
Core values of the company: Code of conduct:

Core value are the fundamental beliefs and A code of conduct is a set of guidelines and rules
principles that guide a company’s behavior and that outline expected behavior and ethical
decision making. Including them in corporate standards for employees and stakeholders. It
published accounts helps stakeholders understand helps promote integrity, transparency and
the company’s ethical framework and its responsible business practices.
commitment to certain principles. Example: Anti corruption measures.
Client engagement:

This includes initiatives such as diversity and

Companies are increasingly recognizing the
importance of engaging with their clients and
stakeholders through their published accounts.
This can include seeking feedback, conducting
surveys, and actively involving clients in the
reporting process.
Example: Some companies may conduct surveys
or focus groups to gather feedback from clients
and incorporate that feedback into their reporting.
inclusion programs, fair employment practices,
community development projects, and efforts to
reduce income inequality.
Example: They may highlight initiatives such as
employee resource groups, mentoring programs
and training opportunities .

Inclusive growth:
Thankyou
Any questions?