Final Accounts of Companies

Lesson

Part 1 — the form of a company Balance Sheet under Schedule III Part I, its heads and sub-heads, and how to classify every balance. Every company, person and figure in this chapter is imagined.

In this lesson you will

State what Section 129 and Schedule III Part I of the Companies Act, 2013 require of a company Balance Sheet
Name the major heads and sub-heads of Equity and Liabilities and of Assets in order, including the amended captions
Decide whether an asset or a liability is current or non-current using the operating cycle and the twelve-month rule
Classify the balances of a company and draw up its Balance Sheet with notes

Part 1 at a glance

Concept

What the law and the ISC syllabus ask for

For ISC 2027 the Statement of Profit and Loss (Part II) is not required for final accounts: profit is given, or found in one working.

Table of the rules behind company final accounts: section one hundred and twenty-nine requires a true and fair view in the form of Schedule Three; Part One gives the vertical balance sheet; Part Two, the statement of profit and loss, is not required for the ISC final accounts; notes give the details; the ISC question asks for a balance sheet with notes from a trial balance and adjustments
Point	Rule
Section 129, Companies Act, 2013	Financial statements must give a true and fair view and follow the form in Schedule III
Schedule III, Part I	Form of the Balance Sheet: vertical; Equity and Liabilities first, then Assets
Schedule III, Part II	Form of the Statement of Profit and Loss: not required for ISC 2027 final accounts
Notes to accounts	The details behind each figure, numbered and quoted against it on the face of the Balance Sheet
The ISC question	A Balance Sheet with notes from a trial balance and adjustments; profit given or found in a working

Concept

The form: Equity and Liabilities

Four major heads, always in this order; each sub-head carries a note number when it needs details.

Schedule III Part I: I. Equity and Liabilities
Major head	Sub-heads (in order)
Shareholders' Funds	(a) Share Capital; (b) Reserves and Surplus; (c) Money Received against Share Warrants
Share Application Money Pending Allotment	— (shown as a head by itself)
Non-current Liabilities	(a) Long-term Borrowings; (b) Deferred Tax Liabilities (Net); (c) Other Long-term Liabilities; (d) Long-term Provisions
Current Liabilities	(a) Short-term Borrowings; (b) Trade Payables; (c) Other Current Liabilities; (d) Short-term Provisions

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