What are the five key features of Schedule III of the Companies Act, 2013, which prescribes the form and disclosures for the Balance Sheet and Statement of Profit and Loss ?

Schedule III of the Companies Act, 2013, for the preparation of financial statements of an accounting year. It has several new features like: A vertical format for presentation of Balance Sheet with classification of Balance Sheet items into current and non-current categories. A vertical format for Statement of Profit and Loss with classification of expenses based on nature. Elimination of the concept of "Schedules" and such information is now to be furnished in terms of "Notes to Accounts". It does not contain any specific disclosure for items included in Schedule VI under the head, "Miscellaneous Expenditure". As per Accounting Standard -16 borrowing cost and discount or premium relating to borrowing could be amortized over the loan period. Further, share issue expenses, discount on shares, discount/ premium on borrowing, etc. are excluded from AS-26. These items be amortized over the period of benefit, i.e., normally 3-5 years. The draft guidance note issued by ICAI suggests that unamortized portion of such expenses be shown under the head "Other Current/Non-current Assets" depending on whether the amount will be amortized in the next 12 months or thereafter. Debit Balance of Statement of Profit & Loss A/c will be disclosed under the head, Reserves & Surplus as the negative figure. No change in the format of cash flow statement as per revised schedule and therefore its preparation continues to be as per AS-3 i.e. cash flow statement. It gives prominence to Accounting Standards (AS), i.e., in case of any conflict between the AS and the Schedule, AS shall prevail.