Revised Schedule VI formats: a step towards Ind-AS formats and disclosures?
The MCA recently issued a revised Schedule VI to the Companies Act, 1956, to lay down a new format for preparation and presentation of financial statements by Indian companies.
The revised Schedule VI introduces many new concepts and disclosure requirements and does away with several statutory disclosure requirements of the existing Schedule VI.
The revised Schedule VI is applicable to companies following Indian GAAP (and not Ind-AS). Though a formal circular/official notification regarding the revised Schedule VI is still awaited, the MCA website states that it is applicable from the financial year 2010-11 onwards.
The revised Schedule VI introduces many new concepts and disclosure requirements and does away with several statutory disclosure requirements of the existing Schedule VI. More importantly, the revised schedule throws up numerous questions, the answers to which may not be straight-forward and would need additional guidance from the MCA or the Institute of Chartered Accountants of India (ICAI).
The efforts involved in implementing the revised Schedule VI, particularly, considering that it applies to 2010-11 financial statements and the consequences thereof should not be underestimated.
The application of the revised Schedule VI will entail significant time and investments and may necessitate customizing IT/MIS systems within a short period. Our Supplement to Assurance Eye gives an overview of the key changes and implications, critical issues and our perspectives thereon.
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