Subject :
Recent Amendments in Schedule VI of the Companies Act, 1956
Speaker : P. R. Ramesh, Chartered Accountant
Date : 4-5-2011
P. R. Ramesh, Chartered Accountant addressed the members of the Society and public at large on the subject of ‘Recent Amendments in Schedule VI of the Companies Act, 1956’ on 4th May, 2011 at IMC. The learned speaker made a threadbare and systematic analysis of the recent amendments in Schedule VI of the Companies Act with and reference to context and by highlighting important issues. The speaker commenced his presentation with the history and applicability of Schedule VI. He explained in depth how Schedule VI came into the Companies Act, formulation of NACS (National Advisory Committee on Accounting Standard), etc. He also gave information about the procedure followed for bringing about these amendments.
The speaker then resolved the issue regarding the date from which the amendments in Schedule VI would apply. He explained that the applicability date would be 1st April, 2011 and not 1st April, 2010. The confusion was created because the Ministry’s website initially showed the applicability date as 1st April, 2010, which was later changed to 1st April, 2011.
The speaker then gave an overview of the revised format of Schedule VI before discussing each specific amendment. He explained to the audience the advantages and problems associated with each and every amendment like removal of ‘Appropriations’ part from the Profit & Loss account, etc.
For the benefit of participants, he individually listed out major highlights from the amendments. He elaborated on the various issues that may crop up like keeping a track of the debtors from the date they become due and not from the date of sale; classification of current and non-current items, absence of the head ‘Net working capital’ in the balance sheet, etc. He also gave an insight on important aspects of IFRS wherever relevant.
Mr. Ramesh encapsulated his analysis by presenting a tabular comparison between the old Schedule VI and revised Schedule VI for clear understanding of the changes. It provided exhaustive information on degree of changes made as compared to the old Schedule.
At the end, he presented important issues to ponder, which arose out of these amendments. Some of these issues were regarding the reclassification of the previous year’s figures into the revised format, whether proposed dividend is to be provided for or not, etc. He also touched upon the implementation issues of Schedule VI, voluminous disclosure requirements; lack of clarity vis-à-vis long-term borrowings, etc.
He concluded by convincing the participants that a change in mindset will be required by everyone dealing with the new Schedule VI.
After his presentation the learned speaker answered all queries raised by members in the audience. His enthusiasm coupled with his deep knowledge of the subject was well appreciated by all the gathering.
The speaker’s presentation is available on the BCAS website. Further, his speech is also available on BCAS Web TV.
