Query in revised schedule vi

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How to treate the following example as per Revised schedule VI for the FY 2011-12 :-

Eg:- For the FY 2010-11, Loan from Directors of Rs 1 Lac treated as a Short Term Borrowing as per revised schedule VI. Later on while finalising the balance sheet for the FY 2011-12, the same amount is still outstanding. Now question arises:-

(1) Is there any problem, if we continue to classify the same amount as a Short Term Borrowing in FY 2011-12 also ?

or

(2) For the FY 2011-12, can we classified the same amount as a Long Term Borrowing ?

or

(3) Is it required to change the classification for the FY 2010-11 from short term borrowing to long term borrowing ?

Replies (4)

Mr. Prateek,

Paragraph 72(a) of IAS 1 deals with this problem which reads as under:

"An entity classifies its financial liabilities as current when they are due to be settled within twelve months after the reporting period even if ; the original term was for a period longer than twelve months".

Further, i wish to reproduce a para which i have studied from a reference book:

Rescheduling a long term loan to pay within twelve months from the BS date: A loan is classified as a current when it is due for settlement within twelve months from the reporting date even if the original term is payable after twelve months from the reporting date.

Hence, in view of above, for classification of assets and liabilities into current and non current the position of that particular item on the BS date is to be considered. 

In your case the previous year classification was made on the basis of situations prevailing and estimates made on that BS date. During the current year there are no issues in re-classification of any item of BS and hence if the loan is to be paid within 12 months from the reporting date then classify the same as current otherwise non current. Kindly consider others opinion also.

Regards,

Shraddha 

Thanks for the information provided by you.

Dear Prateek,

Simple answer to you:

Revised Schedule VI has mandate it to prepare previous years comparative as well but It specifically said comparatives cant be changed due to events are changed after finalisation of FS. For last year, You can not change the figures according to any event occurred after finalisation

HI I AM PURSUING MY IPCC STUDIES AND WILL BE APPEARING IN THE MONTH OF NOV 2012 FOR BOTH GROUP

CAN ANYONE LET ME KNOW THAT FOR "NOT FOR PROFIT ORGANISATION" THE EFFECT OF CAPITAL FUND WILL BE SHOWN IN WHICH HEAD OF ACCOUNT OF BALANCE SHEET

1) SHARE CAPITAL

2) RESERVE AND SURPLUS

 

REGARDS

SAMEER

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