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Schedule III
1. Balance Sheet
2. Profit & Loss
3. Notes to Accounts
1.
2.
3.
4.
Balance Sheet
Profit & Loss
Notes to Accounts
Statement on Subsidiary
% of Net Assets
%
Amount
% of Profit
%
Amount
Subsidiary
Associates
Joint Venture
Share in Minority
Interest
3 Statement prepared u/s 212 of companies act, 1956 is not relevant
Example:Balance Sheet as on 31st March 2015
Share Capital
Reserve & Surplus
Sundry Lib. (Creditors)
Fixed Assets
Investment
60 % Share in S Ltd
30 % Share in J Ltd
25 % Share in A Ltd
Cash
H Ltd
100000
90000
50000
120000
S Ltd
80000
80000
40000
50000
J Ltd
60000
70000
30000
30000
A Ltd
50000
60000
20000
60000
70000
25000
15000
10000
150000
130000
70000
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Additional Information
i.
ii.
Date of Acquisition
1-4-2014 S Ltd
1-4-2013 J Ltd
1-4-2013 A Ltd
iii.
iv.
Prepare Consolidated Balance sheet and statement under Schedule III for subsidiary
Balance Sheet should be as per schedule III
Solution.
W.N.1 Analysis of Profit (AOP)
S Ltd.
Particulars
Reserve & Surplus
Capital
25000
Revenue
55000
Total
80000
Holding 60%
Minority 40%
15000
10000
33000
22000
32000
Capital
10000
Revenue
60000
Total
70000
3000
18000
Capital
15000
Revenue
45000
3750
11250
J Ltd
Particulars
Reserve & Surplus
Minority 25%
A Ltd
Particulars
Reserve & Surplus
Minority 25%
Total
60000
Cost of Control
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Prepared by Raju Choudhary
raj302026@gmail.com
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Investment
(-) Share Capital
(-) Pre Acquisition Profit
Goodwill/ (CR)
S Ltd
70000
48000
15000
7000
J Ltd
25000
18000
3000
4000
A Ltd
15000
12500
3750
(1250)
32000
Pre
Post
10000
22000
62000
Total
Investment in A Ltd
Opening Balance
(+) Reserve & Surplus
15000
11250
26250
Consolidated P & L
Reserve & Surplus
(+) Post Reserve & Surplus of S Ltd
(+) Post Reserve & Surplus of J Ltd
(+) Post Reserve & Surplus of A Ltd
Total
90000
33000
18000
11250
152250
Amount
J.V.
100000
152250
64000
99000
A.
415250
179000
11000
26250
199000
415250
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Statement under Schedule III for Subsidiary (Instant of Sec 212 statement)
Name
Net Assets
Reserve & Surplus
%
Amount
%
Amount
Subsidiary
52.81
167000
21.67
33000
S Ltd.
(167000/316250*100)
(33000/152250*100)
Share in M. Intt.
20.33
(64000/316250*100)
64000
14.41
22000
Joint Venture
J Ltd
13.60
43000
11.32
18000
Associates
A Ltd.
8.30
2625
7.39
11250
Note:Net Assets
Overall Balance Sheet = 316250
Sub. Part
= 167000
% of Sub.
= 167000/316250*100 = 52.81%
(4) As Per Section 129 of New Act, Consolidation of A/cs is Mandatory. Earlier Clause 32 of SEBI
listing requirements was reason for consolidation but now consolidation is required as per
companies Act, 2013
(5) As per Accounting Standard 21 Subsidiary which is temporary in nature is not required to be
consolidation
Rules notified by MCA state that Form No AOC I should be submitted to ROC, for non
consolidation of temporary subsidiaries
(6) Example
H Ltd (+) S Ltd
H Ltd (+) S Ltd (+) J Ltd
H Ltd (+) J Ltd
H Ltd (+) A Ltd
New Law
Yes
Yes
Yes
Yes
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Yes
Yes
No
Yes
(11) Ind As are still not applicable as per ICAI press Release in March, 14 Ind AS should apply from
1/04/2016. Hence its effects can be seen in 2016-17. ICAI has asked the comparatives will not be as
per IND AS but as per AS of MCA.
Share Capital
R&S
NCL
CL
2016-17
2015-16
AS Per IND - AS
As Per AS of NACAS
AS Per IND - AS
As Per AS of NACAS
NCA
CA
Note: - Best Chance for IND AS in exam can be Nov. Or after that
(12) AS 30, 31, 32 are still not mandatory (But ICAI asked questions from these chapter)
(13) Level II Entities of framework had following Points
Entities whose turnover in previous year was Rs 40 Lakh = 1 Crore
Entities Whose borrowings in Previous year were 1 crore
(14) AS- 15 Allowed Entities to purchase own shares through trust.
Generally these shares were used for ESOPS
SEBI Has issued one order, Which Prohibits such purchase of shares through trusts
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Example
A Ltd Has Following Profits
2012-13
201314
2014-15
100 Cr.
120 Cr.
160 Cr.
During the year 2014-15, Company has incurred expenses on CSR for Rs 1.5 Cr. What should be its
accounting treatment?
Solution
Calculation of Avg. Profits
100+120+160
3
Expenses to be incurred @ 2% of Profits
Less: - Expenses Incurred
Short Fall
=
=
122.67
2.5333 Cr
1.5000 Cr.
1.0333 Cr
Company should make provision for CSR expenses for Rs 1.03333 Cr.
Expenses of Rs. 2.5333 will be shown in P &L as Expenses
(16) Assets worth Rs 5000 or less were earlier written off as expenses
But Schedule II of new companies act does not require such written off. Hence as per new
law companies can show assets whose is Rs 5000 or Low in Books of Accounts
[Both Options Are available (we written off and we show)]
(17) Depreciation will be charged as per schedule II and Schedule XIV of old Act is not relevant
(18) Depreciation Charged on revalued assets will always be adjusted against P & L account
Revaluation Reserve will not be used for adjusting Depreciation
Example
Building Book Value
(+) Upward Revaluation
=
=
1000000
200000
1200000
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Solution
i.
ii.
iii.
Building A/c
Dr.
To Revaluation Reserve
(Being Building Revalued)
200000
Depreciation A/c
Dr.
To Building
(Being Depreciation Charged)
120000
SPL A/c
Dr.
Revaluation Reserve A/c Dr.
To Depreciation
(Being Depreciation Written Off)
120000
200000
120000
120000
(19) Para 46: Inserted an AS of ICAI in March, ICAI has Inserted Para in AS - 11 of ICAI
As Per Para 46 - :
i.
ii.
iii.
Example
A Partnership (AS of ICAI Apply) firm gives following information.
1. Long Term loan 1st (Repayable After 3 Year) Rs 10,00,000 , Exchange Loss Rs 50,000
2. Long Term loan 2nd (Repayable After 5 Year) Rs 20,00,000 , Exchange Loss Rs 80,000
3. Long Term loan 3rd (Repayable After 7 Year) Rs 15,00,000 , Exchange Loss Rs 90,000
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4. Long Term loan Taken For Machine (Repayable After 6 Year) Rs 20,00,000 , Exchange Loss
Rs 1,00,000
5. Short Term Loan Rs 10,00,000 , Exchange Loss Rs 50000
Additional Information: Life of machine is 20 year
Book Value of Machine is Rs 25,00,000
(Opening Balance)
Suggest Accounting Treatment
Solution
AS of NACAS are not applicable on Partnership firm, Earlier AS 11 of ICAI had accounting
treatment under Para 13, which required Exchange Loss / Gain to be transferred to SPL. Now also
option to para 13 exists
Hence partnership firm can transferred total Exchange loss to SPL Rs
3, 70,000
OR
2nd Choice is newly introduced para 46
Loan No
Covered By Para 46
1
Yes
2
Yes
3
Yes
4
Yes
5
No
Para 46
Particulars
To Exchange Loss
Amount
16667
33333
Particulars
To Exchange Loss
Amount
16000
64000
Particulars
To Exchange Loss
Amount
12857
77143
Particulars
To Balance B/d
To Exchange Loss
Amount
130000
24,70,000
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Balance Sheet
Particulars
Amount
(174476)
(20) As per notification of MCA, FCMIT difference A/c should be shown in Balance Sheet under head
reserve and surplus.
(21) In Case Exchange Difference is treated under Para 46, than such Exchange difference cannot be
classified Borrowing cost, hence AS- 16 will not be applied on Such Exchange Difference
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