Disclosure Requirements under Schedule VI ( Part I and Part II )

Schedule VI Disclosure requirements

As per Part I:-

Sundry Debtors should be classified as:

1) Debts outstanding for a period exceeding six months:-

  • Debts considered good in respect of which the company is fully secured; 
  • Debts considered good for which the company holds no security other than the debtors’ personal security; 
  • Debts considered doubtful or bad. 
2) Other debts 

3) Provision for doubtful debts: This should be shown by way of a deduction from total debtors.

4) Debts due from related parties should be disclosed as:

  • Debts due by directors or others officers of the company or any of them either jointly or severally with any other person 
  • Debts due by firm in which any directors is a partner 
  • Debts due by a private company in which a director is a director / member. 
The maximum amount due by directors or other officers of the company at any time during the year should be shown by way of note;

The provision should not exceed the amount considered doubtful or bad and any excess of such provision, if already created should be shown under "reserves and surplus" under a separate sub head "reserve for doubtful or bad debts".

The amount to be shown under sundry debtors should include the amounts due in respect of goods sold or services rendered or in respect of other contractual obligations but should not include any amounts which are in the nature of loans and advances.

As per Part II

The profit and loss account shall set out the various items relating to the income and expenditure of the company arranged under the most convenient heads; and in particular, shall disclose the following information in respect of the period covered by the account:

  • The turnover, that is, the aggregate amount for which sales are effected by the company, giving the amount of sales in respect of each class of goods dealt with by the company, and indicating the quantities of such sales for each class separately. Turnover should be disclosed in the accounts at Gross Value and also net of Excise Duty. 
  • Brokerage and discount on sales, other than the usual trade discounts. 


Post a Comment