Sample Disclosure for ICDS - Applicable for FY 2016-17 |
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ICDS I - ACCOUNTING POLICIES |
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Check Points |
Points to be fed in 13(f) |
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1. |
All significant accounting policies adopted by a person. |
Financial Statements |
Mercantile method of accounting employed. Expenses and Income are accounted for on accrual basis as per generally accepted accounting principles in India |
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2. |
Any change in an accounting policy which has a material effect shall be disclosed. The amount by which any item is affected by such change shall also be disclosed to the extent ascertainable. Where such amount is not ascertainable, wholly or in part, the fact shall be indicated. If a change is made in the accounting policies which has no material effect for the current previous year but which is reasonably expected to have a material effect in later previous years, the fact of such change shall be appropriately disclosed in the previous year in which the change is adopted and also in the previous year in which such change has material effect for the first time. |
3CD - Clause 13 (b), (c) |
Applicable only if some change is there |
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ICDS II - VALUATION OF INVENTORIES |
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1. |
The accounting policies adopted in measuring inventories including the cost formulae used. Where Standard Costing has been used as a measurement of cost, details of such inventories and a confirmation of the fact that standard cost approximates the actual cost. |
3CD - Clause 14 (a) |
As per Cost or NRV whichever is lower on Specific Identification method/Weighted Average/ First In First Out valued as per Standard Cost/Retail Method Inventory has been valued as per exclusive method however |
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2. |
The total carrying amount of inventories and its classification appropriate to a person. |
3CD - Clause 35 |
Total amount of inventory with bifurcation
(Clause of financial statement may also be referred ) |
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ICDS III - CONSTRUCTION CONTRACTS |
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1. |
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Management certificate |
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2. |
A person shall disclose the following for contracts in progress at the reporting date, namely:
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Each contract needs to be looked upon. Advance as on BS to be reported |
Amount to be shown |
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ICDS IV - REVENUE RECOGNITION |
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1. |
In a transaction involving sale of good, total amount not recognized as revenue during the previous year due to lack of reasonably certainty of its ultimate collection along with nature of uncertainty. |
Scrutiny |
Not Applicable/The Rs XX,xx amount was not recognized due to lack of reasonable certainty |
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2. |
The amount of revenue from service transactions recognized as revenue during the previous year. |
Scrutiny Each contract needs to be looked upon. Advance as on BS to be reported |
Amount to be shown |
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3. |
The method used to determine the stage of completion of service transactions in progress. |
Proportion of contract cost with respect to estimated contract cost method/surveys of work performed method/physical proportion method has been used for calculation of percentage of completion |
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4. |
For service transactions in progress at the end of previous year
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ICDS V - TANGIBLE FIXED ASSETS |
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1. |
Description of asset or block of assets |
3CD - Clause 18 |
As per clause 18 of Tax audit report |
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2. |
Rate of depreciation |
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3. |
Actual cost or written down value, as the case may be |
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4. |
Additions or deductions during the year with dates; in the case of any addition of an asset, date put to use; including adjustments on account of -
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5. |
Depreciation allowable |
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6. |
Written down value at the end of year |
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ICDS VII - GOVERNMENT GRANTS |
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1. |
Nature and extent of Government grants recognized during the previous year by way of deduction from the actual cost of the asset or assets or from the written down value of block of assets during the previous year. |
Scrutiny |
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2. |
Nature and extent of Government grants recognized during the previous year as income. |
As per Profit & Loss Account |
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3. |
Nature and extent of Government grants not recognized during the previous year by way of deduction from the actual cost of the asset or assets or from the written down value of block of assets and reasons thereof. |
MRL, Fixed asset register/schedule and grants received |
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4. |
Nature and extent of Government grants not recognized during the previous year as income and reasons thereof. |
MRL & check grants received from financial |
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ICDS IX - BORROWING COSTS |
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1. |
The accounting policy adopted for borrowing costs. |
Scrutiny |
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2. |
The amount of borrowing costs capitalized during the previous year. |
Financials |
Amount needs to be disclosed |
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ICDS X - PROVISIONS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES |
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1. |
A brief description of the nature of the obligation. The carrying amount at the beginning and end of the previous year. Additional provisions made during the previous year, including increases to existing provisions. Amounts used, that is incurred and charged against the provision, during the previous year. Unused amounts reversed during the previous year. |
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6. |
The amount of any expected reimbursement, stating the amount of any asset that has been recognised for that expected reimbursement. |
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7. |
Following disclosure shall be made in respect of each class of asset and related income recognised as provided in para 11, namely:—
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Notes in case Income is being taxed on accrual basis irrespective of fact ICDS guides otherwise. For e.g. retention money, Interest on accrual etc.
Taxpayer has adopted a position that retention money/interest income on non-performing asset /xxxx is not to be recognized as revenue since it does not become 'due' to the taxpayer in absence of accrual conditions as per Section 5 being met. Reliance has been placed on judicial precedents like E.D. Sassoon & Co. Ltd. v CIT (1954) 26 ITR 27 (SC), CIT v Excel Industries Limited (2013) 358 ITR 295 (SC) and XXXXx. Accordingly, the total taxable income does not include the amount of said retention money/interest income on non-performing asset.
If any clause is not applicable, rather than leaving it blank. 'Not applicable' should be written.
Appropriate management representation letter should be obtained from assessee. Disclosures needs to be suitable modified as per specific requirements.
The author can also be reached at namanshrimal@jainshrimal.com