(iii)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:
l A vertical format for presentation of Balance Sheet with classification of Balance Sheet items into current and non-current categories.
l A vertical format of Statement of Profit and Loss with classification of expenses based on nature.
l Elimination of the concept of “Schedules” and such information is now to be furnished in terms of “Notes to Accounts”.
l 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 The draft guidance note issued by ICAI suggests that unamortized portion of such expenses be shown under the head “Other Current/Non-current Assets” depending on whether the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.
l Debit Balance of Statement of Profit & Loss A/c will be disclosed under the head, Reserves & Surplus as the negative figure.
l 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.
l It gives prominence to Accounting Standards (AS), i.e., in case of any conflict between the AS and the Schedule, AS shall prevail.
Source: ICSI Guideline Answers, December 2025, Q. 4A(iii) (Syllabus 2022).