File Name: profit and loss account format as per companies act 1956 .zip
The Act is a comprehensive landmark legislation that governs all the aspects of all listed and unlisted companies in India. Some of the noteworthy features that the act provides for are as democracy and supremacy of shareholders; strengthening women participation at the directorial level;prescribes for mandatory corporate social responsibility; establishes the National Company Law Tribunal; allows fast track and cross border mergers; prohibits forward dealing and insider trading; provides for one person companies, e-governance, independent directors; defines the duties and liabilities of directors and key officers; provides for the rotation of auditors and rehabilitation and liquidation process of the companies.
Amidst the comprehensive, exhaustive provisions of the Companies Act , this article focuses on the ten important requirements under the provisions of the act with regards to completing financial statements.
Further, it is also important to understand some key concepts. The statements have to be prepared at the end of the financial year and may be kept in electronic form provided they are complete and unaltered. Further, all such statements and books have to be preserved at the companies registered office or any other place that the Board of Directors may decide. It is important to note that, cash flow statements are not mandatory for small companies, one person companies and dormant companies.
The Financial Statements shall abide with the accounting standards and be in the form as prescribed in Schedule III and shall give a true and fair view of the financial condition of the company. The financial statements shall be disclosed in the annual general meeting. In case of a holding company, it shall additionally prepare a Consolidated Financial Statement of the Company along with that of its subsidiaries, associates and joint ventures and disclose it at the annual general meeting.
A company is required to attach with its Financial Statements, a separate form AOC-1 in order to file it with the Registrar of Companies. The financial statements including the consolidated financial statement has to be approved and signed as prescribed, by the Board of Directors. It can be signed either by the authorized chairperson of the Board or by at least 2 directors and the appointed company secretary. The Companies Act provides for the re-opening or re-casting of the books of accounts pursuant to an order of the Court or Tribunal on an application made by the Central Government, Statutory Authority or any person concerned if, it was found that the earlier accounts were prepared in a fraudulent manner due to the mismanagement of the affairs of the company.
Further, if it appears that the financial statements or board reports are not in compliance with the provisions of this Act, the Company may revise such statement or report with the approval of the Tribunal. Such revised or re-casted reports or statements shall be final. The Board may pass a resolution to revise the financial statements or books of accounts if, they believe that the statements do not comply with the requirements of Section or Section Such revision can be done for any of the 3 preceding financial years, only after obtaining prior approval of the Tribunal.
The reason for the revision along with the revised statements have to be filed in the Board Report and needs the approval of the board at the annual general meeting. Such revised financial reports have to be filed with the Registrar of Companies along with a copy, if any, of the Tribunal.
The Companies Act provides that, the Central Government may, by notification, constitute the National Financial Reporting Authority with the predominant objective of advising on Accounting Standards AS and Auditing Standards SA and to monitor, enforce, and oversee the compliance and quality of service of associated professionals.
The National Financial Reporting Authority shall have the power to investigate companies or professionals in the matters of misconduct, order discovery production of books of accounts, summon or enforce attendance, order inspection of books, registers and documents, pass orders.
The Central Government may, after consultations with the National Financial Reporting Authority, may prescribe the Accounting Standards to be adopted by the companies in completion of their financial statements.
The following Accounting Standards AS are applicable to all companies. The AS-1 for disclosure of accounting policies; the AS-2 for valuation of inventory; the AS-3 for cash flow; the AS-4 for contingencies and events occurring after balance sheet date; AS-5 for net profit or loss for the period; AS-6 for depreciation; the AS-7 for construction contracts; the AS-9 for revenue recognition; the AS for accounting of fixed assets; the AS for the effects of change in forex rates; the AS for government grants; the AS for investments; the AS for amalgamations; the AS for borrowing costs; the AS for segment reporting; the AS for related party transactions; the AS for income taxes; the AS for discontinuing operations and the AS for intangible assets.
In case a company has to prepare consolidated financial statements, the following accounting standards would have to be followed; the AS for consolidated financial statements, the AS for investment in associate companies; the AS for reporting of interest in joint ventures and the AS for interim financial reporting. The Directors Responsibility Statement shall contain the details of the accounting standards followed with explanations for material departures, prudent judgments made as to give a true and fair view of the state of affairs of the company, measures taken to maintain adequate accounting records and safeguard assets, and measures taken to ensure compliance with all applicable laws.
All members have the rights to receive the copies of financial statements and every report required to annexed with the financial statements at least 21 days before the date of the annual general meeting. The financial statements along with prescribed reports have to be filed with the Registrar of Companies within 30 days of the Annual General Meeting. Find sample Annual Report here.
The Companies Act requires companies to e-file the following documents annually with the Registrar of Companies. Sign in Join. Sign in. Log into your account. Sign up. Password recovery. Forgot your password? Get help. Login with your social accounts:. Create an account. Post Views: Share on Facebook.
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Few essential factors of the balance sheet are listed below: Creditors, investors, and other stakeholders use this financial tool to know the financial status of a business. It provides a snapshot summary of what a business owns or is owed - assets -and what it owes -liabilities -at a particular date. It can also be referred to as a statement of net worth, or a statement of financial position. Net Worth. Schedule III to the Companies Act, deals with the form of Balance Sheet and Profit and Loss Account and classified disclosure to be made therein and it applies to all the companies registered under the Companies Act,
Where compliance with the requirements […]. Financial Statements for a company whose Financial Statements are required to comply with the Companies Accounting Standards Rules, Where compliance with the requirements of the Act including Accounting Standards as applicable to the companies require any change in treatment or disclosure including addition, amendment, substitution or deletion in the head or sub-head or any changes, inter se, in the financial statements or statements forming part thereof, the same shall be made and the requirements of this Schedule shall stand modified accordingly. The disclosure requirements specified in this Schedule are in addition to and not in substitution of the disclosure requirements specified in the Accounting Standards prescribed under the Companies Act, Additional disclosures specified in the Accounting Standards shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of the Financial Statements. Similarly, all other disclosures as required by the Companies Act shall be made in the notes to accounts in addition to the requirements set out in this Schedule. In preparing the Financial Statements including the notes to accounts, a balance shall be maintained between providing excessive detail that may not assist users of financial statements and not providing important information as a result of too much aggregation.
Format of Balance Sheet as per Schedule VI to the Companies. Act 3. Format of Statement of Profit & Loss (In accordance with the requirements for Board.
Section and of the companies act specifies regarding preparation of final accounts.
What are provisions relating to financial statements under the New companies act New section corresponds to existing section It provides that the financial statements shall give a true and fair view of the state of affairs of the company and shall comply with the accounting standards notified under new section
The revised Schedule VI has been framed as per the existing non-converged Indian Accounting Standards notified under the Companies Accounting Standards , Rules, and has no connection with the converged Indian Accounting Standards. The revised Schedule VI will apply to all the companies uniformly for the financial statements to be prepared for the financial year and onwards. Your email address will not be published. Post Comment.
AND STATEMENT OF PROFIT AND LOSS OF A COMPANY IN ADDITION. TO THE NOTES Accounting Standards prescribed under the Companies Act, .
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