ICAI revised Guidance Note on Non Ind AS /IndAS Schedule III of the Companies Act 2013
In 2016, immediately after the introduction of format of Schedule III to the Companies Act 2013 , the ICAI had brought the first edition of the Guidance Note on Division I – Non Ind AS Schedule III to the Companies Act 2013 to guide the chartered accountants.
The Division I to the Schedule III of the Companies Act, 2013 lays down the format for preparation of the financial statements by the Companies that are required to comply with Companies (Accounting Standards), Rules, 2006.
The ICAI also issued the Guidance Note on Schedule III to the Companies Act, 2013 (the ‘Act’) in July, 2017 after considering the newly introduced Division II – Non Ind AS Schedule III to the Act.
In the amended Division I – of Schedule III, the major revisions have been made are that the Words Fixed Assets”, have been replaced with the words, “Property, Plant, and Equipment” for trade payables w.r.t. MSME, disclosure of specific details required as per the MSMED Act, 2006 have been added.
Major amendments have also been made in the Division II of Schedule III. In the case of Trade Receivables and Loan Receivables, it has been provided that the total amount needs to be segregated into categories and disclosed viz., considered good, having significant increase in credit risk and credit impaired. Guidance has been provided regarding the disclosure of impairment on trade receivables in cases where significant financing component exists and in cases where it does not exist. Trade payables are now required to be segregated into dues of micro enterprises and small enterprises and other than micro enterprises and small enterprises, w.r.t. MSME. Specific details mandated as per the MSMED Act, 2006 require disclosure. The Ministry of Corporate Affairs vide Notification dated 11.10.2018 have made amendments to Schedule III to the Act. The changes made are with reference to fixed assets and securities premium reserve.
Therefore, there was a need to revise the aforesaid Guidance Note.
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