CBSE Class 12 Accountancy Implementation Of Schedule VI Of Companies Act Notes

CBSE Class 12 Implementation Of Schedule VI Of Companies Act Notes. Learning the important concepts is very important for every student to get better marks in examinations. The concepts should be clear which will help in faster learning. The attached concepts made as per NCERT and CBSE pattern will help the student to understand the chapter and score better marks in the examinations.



General Instructions-

• 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

classified into:

Tangible Assets;

• 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;

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