Download CBSE Class 12 Accountancy Implementation Of Schedule VI Of Companies Act Notes in PDF format. All Revision notes for Class 12 Accountancy have been designed as per the latest syllabus and updated chapters given in your textbook for Accountancy in Standard 12. Our teachers have designed these concept notes for the benefit of Grade 12 students. You should use these chapter wise notes for revision on daily basis. These study notes can also be used for learning each chapter and its important and difficult topics or revision just before your exams to help you get better scores in upcoming examinations, You can also use Printable notes for Class 12 Accountancy for faster revision of difficult topics and get higher rank. After reading these notes also refer to MCQ questions for Class 12 Accountancy given our website
IMPLEMENTATION OF SCHEDULE VI OF COMPANIES ACT
• Revised Schedule VI applicable on all the companies with effect from 1stApril, 2011
• In case of any controversy, Accounting Standards will prevail over the Schedule;
• Only Vertical format of Balance Sheet is prescribed;
• Prescribes minimum disclosure requirements in the Balance Sheet. All other disclosures as required by the Companies Act, 1956 shall be made in the notes to accounts in addition to the requirements set out in this Schedule.
• Shareholding of more than 5% shares in the company now needs to be disclosed;
• Share allotments for non-cash consideration, buy back to be disclosed;
• Where the normal operating cycle cannot be identified, it is assumed to have duration of twelve months. New name for P & L Account is “Statement of Profit and Loss”;
• Format for Statement of Profit and Loss has been prescribed Segregation of Revenue components into revenue from:
-sale of products,
-sale of services, and
-other operating revenues
Equity and Liabilities
• Liabilities side of Balance Sheet is known as ‘Equity and Liabilities’ and shown as Part A of Balance Sheet (Vertical Form)
• Current/ Non-Current Distinction-- If entity does not have unconditional right to defer settlement of liability for at least 12 months after reporting period, it will be treated as
• All expenses or provisions or advances or loans etc. which are accrued and payable within 12 months are current liabilities.
• Provisions to be shown under Long – term provisions and Short-term provisions.
• Loss from Statement of Profit and Loss is to be deducted from existing credit balance in Statement of Profit and Loss under ‘Reserves and Surplus’.
• If the net amount after transfer, results is negative amount, it is shown as negative amount under the head Statement of Profit and Loss.
• Statement of Profit and Loss (Dr. Balance) will be disclosed under the head “Reserves and Surplus”.
• Share application money pending allotment is not a part of Shareholders’ Funds; Assets
• All items of assets and liabilities are to be bifurcated between current and non-current portions and presented separately on the face of the Balance Sheet.
• Fixed assets were shown under one broad category i.e. fixed assets. Fixed assets are
• Intangible Assets;
• Capital Work – in – progress;
• Intangible Assets under Development.
• Provision for Doubtful Debts is not deducted from Trade Receivables but is shown as short-term Provisions under Current Liabilities.
• Loose Tools is to be classified as ‘Inventory’ under Current Assets.
• “Sundry Debtors” has been replaced with the term “Trade Receivables”;
• Disclosure of trade receivables outstanding for a period exceeding six months from the date of bill/invoice is due for payment;
• Separate head for Intangible Assets and Intangible Assets under Development;
• Capital Advances have to be shown separately under “Loans and Advances” instead of Fixed Assets;
1. An asset shall be classified as current when it satisfies any of the following criteria:
(a) it is expected to be realised in, or is intended for sale or consumption in, the company’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is expected to be realised within twelve months after the reporting date; or
(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.
All other assets shall be classified as non-current.
2. An operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Where the normal operating cycle cannot be identified, it is assumed to have duration of 12 months.
3. A liability shall be classified as current when it satisfies any of the following criteria:
(a) it is expected to be settled in the company’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within twelve months after the reporting date; or
(d) the company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
All other liabilities shall be classified as non-current.
4. A receivable shall be classified as a ‘trade receivable’ if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business.
5. A payable shall be classified as a ‘trade payable’ if it is in respect of the amount due on account of goods purchased or services received in the normal course of business.
6. A company shall disclose the following in notes to accounts:
6A. Share capital Clauses (a) to (l) of Notes 6 A deal with disclosures for Share Capital and such disclosures are required for each class of share capital (different classes of preference shares to be treated separately).
The number and amount of shares authorized
b. The number of shares issued, subscribed and fully paid, and subscribed but not fully paid
c. Par value per share
d. A reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period
e. The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital
f. Shares in respect of each class in the company held by its holding capacity or its the holding company or the ultimate holding company in aggregultimate holding company including shares held by or by subsidiaries or associates of
1. Shares in the company held by each
2. h. Shareholder holding more than 5 per cent shares specifying the number of shares held
3. Shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment, including the terms and amounts
4. j. For the period of five years immediately preceding the date as at which the balance sheet is prepared : aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash.
5. Aggregate number and class of shares allotted as fully paid up by way of bonus shares.
iii. Aggregate number and class of shares bought back.
1. k. Terms of any securities convertible into equity/preference shares issued along with the earliest date of conversion in descending order starting from the farthest such date
2. Calls unpaid (showing aggregate value of calls unpaid by directors and officers)
6B. Reserves and Surplus
(i) Reserve and surplus shall classified as follows
a) Capital Reserves
b) Capital Redemption Reserve
c) Securities Premium Reserve
d) Debenture Redemption Reserve
e) Revaluation Reserve
f) Share Options Outstanding Account
g) Other Reserves (specify the nature and purpose of reserve and the amount in respect thereof)
h) Surplus e. balance in Statement of Profit & Loss disclosing allocations and appropriations such as dividend, bonus shares and transfer to/from reserves, etc.
(Additions and deductions since the last Balance Sheet to be shown under each of the specified head)
(ii) A reserve specifically represented by earmarked investments shall be termed as a ‘fund’. (i) Debit balance of statement of profit and loss shall be shown as a negative figure under
the head ‘Surplus’. Similarly, the balance of ‘Reserves and Surplus’, after adjusting negative balance of surplus, if any, shall be shown under the head ‘Reserves and Surplus’ even if the resulting figure is in the negative.
6C. Non-Current Liabilities
1. Long-term borrowings:
• Long-term borrowings shall be classified as:
(b) Term loans;
• from banks;
• from other parties;
(c) Deferred payment liabilities;
(e) Loans and advances from related parties;
(f) Long term maturities of finance lease obligations;
(g) Other loans and advances (specify nature).
• Borrowings shall further be sub-classified as secured and unsecured. Nature of security shall be specified separately in each case.
Please click the link below to download pdf file for CBSE Class 12 Implementation Of Schedule VI Of Companies Act Notes.
Click for more Accountancy Study Material ›