12 April 2010
X co. ltd. passed resolution at its EGM in 21.7.09 to increase authorised capital. But the company have not yet filed form 5 with ROC till date. Can the company show increased authorised capital in the balance sheet as on 31. 3 10 considering the fact that form 5 is to be filed after paying interest for delay beyond 60 days
12 April 2010
Strictly, the authorised capital gets increased once approved by the members. However, since the fees has not been paid, the auditors might object to it. Even the ROC would object the same since the Form 5 is not filed.
12 April 2010
For showing the any item on the balance sheet date, the item must exist on the date of balance sheet. But as per AS-5, the events occuring after the balance sheet provide information affecting the determination of the amounts relating to the conditions existing at the balance sheet date, requires adjustment in the balance sheet.
In our query, same case, the resolution was passed before the financial year end but Form 5 is later on with extra fee. So, it can be said that on the balance sheet date, the conditions or circumstances justifying the requirement to present the balance sheet with increased authorised capital.
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