Disclosed before finalizing Financial Statement at year end

key points to be disclosed or considered before finalizing the financials statement of Companies for the FY ended 202X.

The finalization of an entry in the book of accounts for an entire financial year is referred to as the finalization of an account. The creation of the Trial Balance based on the ledger account marks the beginning of the finalization of accounts procedure. When the books of accounts are finalized, it means they have been checked, reconciled, and are accurate, flawless, & Correct. At the end of the year, the books of accounts are typically closed. The ideal practice is to test and reconcile accounts frequently, such as monthly or quarterly.

Companies Act 2013 Schedule III contains the basic instructions for preparation of Statement of Profit and Loss & Balance Sheet of a Company.

Amendments in schedule III Companies Act 2013

Changes made in the notes to accounts on account along with the FS of amendments in Schedule III  Basic changes made in the notes to accounts on account along with the financials statement of amendments in Schedule III brought about by Ministry of Corporate Affairs:

1. Now companies have to round off the figures appearing in the financial statements, hitherto it was optional. Moreover, the conditions for rounding off shall be based on “total income” in place of “turnover”.
2. The company must disclose, why funds were used for purposes different than those for which they were lent, as well as the reasons those funds were used.
3. When a company borrows money from banks based on the securities of current assets, it must be disclosed if the accounts are combined with the quarterly or monthly reports filed with the banker, or otherwise a separate recapitalization statement must be issued.
4. We required to be disclosed Shareholding of Promoters of Company,
5. New requirements add that to disclosed Long term borrowings current maturities has to be disclosed,
6. We are required to provide ageing of Trade Payables schedule.
7. Trade Receivables ageing schedule to be given.
8. it is required to be noted that Security deposits shall be disclosed under ‘Other non current assets’ instead off ‘Long term loans and advances’.
9. where the Company is the lessee and Lease agreements are duly executed in favour of the lessee Other than properties, the Company shall provide details of all movable property for which title deeds are not held. Where such movable property is jointly held with others, the Company shall provide details to the extent of the Company’s share.
10. If there has been a revaluation of property, plant, or equipment, the corporation must state whether a registered valuer performed the appraisal.
11. Where advances or loans in the character of loans are issued to directors, promoters, Key Managerial Personnel & other related parties (promoters’ loans as a percentage of total loans), disclosures must be disclosed in the Financial Statement.
12. In case any CWIP (Capital-work-in progress), we must have to provide the ageing schedule
13. In case any Intangible assets under development, we must disclose the aging schedule.
14. Disclosure of any proceedings initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition)Act, 1988 to be made.
15. In case any company is a declared willful defaulter by any financial Institution or bank or other financial lender, details to be given. Like Disclosure of any transactions with struck off of the companies
16. Where any charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period, details and reasons thereof shall be disclosed.
17. We needed to disclosure of share premium to be given & Utilization of Borrowed funds Explanation is needed in case any change of more than 25% as compare to Last FY.
18. Moreover disclosures shall be made where Co. has received funds from any orgination or any persons including foreign entities to invest or further lend or provide any guarantee, security to 3^rd
19. Where a scheme of arrangement has been approved, disclosure financial Statement shall be made of the effect of the same on the books of accounts and any deviation from the accounting standards for the same.
20. Below Accounting Ratios to be disclosed in the financial Statement:

• Net profit ratio,
• Trade Receivables turnover ratio,
• Return on Equity Ratio,
• Return on investment
• Current Ratio,
• Debt Service Coverage Ratio,
• Return on Capital employed,
• Debt-Equity Ratio,
• Inventory turnover ratio,
• Trade payables turnover ratio,
• Net capital turnover ratio.