On March 24, 2021, changes to Schedule III of the Companies Act of 2013 were made to enhance the accuracy and dependability of financial accounts. Schedule III also includes some new disclosures, such as loans to promoters, Benami transactions, disclosures about promoter shareholding and subsidiaries, and reconciliation of working capital filings with banks. In this article, we will look into the Amendments in Schedule III of the Companies Act, 2013.
To ensure consistency in financial statements, Schedule III offers a common reporting format. Amendments in Schedule III to the Companies Act, 2013 consist of 3 divisions that are discussed below:
The modifications to Division I are more minor and largely concern the terminology used on the balance sheet of an AS (Accounting Standard) compliant businesses, such as the substitution of “Property, Plant, and Equipment” for “Fixed Assets” under “Non-current Assets.”
Several changes have been made to businesses that are compliant with Indian AS. The changes made to Indian AS compliant enterprises with regard to the creation and presentation of their financial statements are as follows:
Financial Statements for an NBFC that are prepared in accordance with the 2015 Companies (Indian Accounting Standards) Rules. NBFCs subject to Indian AS – General Requirements is explained below:
In addition to what is shown in the financial statements, the Notes must include the following provisions:
Under the Benami Transactions (Prohibition) Act of 1988 and the rules made thereafter, the company is required to disclose all Benami property in respect of which legal action has been taken or is pending against the company for possessing any Benami property.
The following must be disclosed by the Company:
As per the amendments in Schedule III, it is important for an entity to specify the minimal information that must be disclosed in the Notes, Balance Sheet, Statement of Profit or Loss for the Period, and Statement of Changes in Equity for the Period. According to the applicable Indian Accounting Standard, a cash flow statement needs to be formed by an accountant so that a complete view of cash flows of a company can be known.
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