INTRODUCTIONSchedule III, which prescribes disclosures and formats of financial statements of every Company in India, was revised by
notification dated 24th March, 2021 of the MCA. These amendments are effective from 1st April, 2021 i.e.,
for all financial statements for periods beginning on or after 1st April, 2021.
The companies following calendar year i.e., January to December
therefore will have to comply for periods commencing from 1st January,
2022. Since financial reporting is a critical communication mode between
the preparers and users of financial statements (FS), many of the
changes like disclosures about relationships with struck-off companies,
ratios, promoters’ shareholding, capital work-in-progress, intangible
assets under development, ageing analysis, undisclosed income, etc. have
far-reaching
implications for prepares and statutory auditors.
Both will have to put extensive efforts in the preparation of the FS in
terms of understanding what is needed, gathering information, and
ensuring its accuracy and completeness as well as internal consistency.
Over the years, globally, the trend has been to make information that
the preparer has available to the user. Therefore, Schedule III, too
has, kept up with the pace in prescribing disclosures in granular
details that was earlier not available to investors. Not only that, but
the preparers are mandated to include
similar additional information
