The ministry of corporate affairs ( MCA) has issued a revised Schedule VI to the Companies Act that lays down a new format for presentation of financial statements by Indian companies. And, the new requirements will apply to many companies for the year ending March 31, 2012. The revised Schedule VI aims to make financial statements more relevant to users by adding disclosures that are necessary for a correct assessment of the financial position of a company. It also eliminates disclosures such as licensed capacity and quantitative details of inventory that may not be relevant to users. A significant new requirement is to classify all assets and liabilities into current and non-current categories. What constitutes a current asset or a current liability is defined. Essentially, assets or liabilities that are expected or due to be realised or settled within 12 months from the balance sheet are classified as current.
Source: Economic Times
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