Advance Accounting
- Section 129 of companies act 2013, provides for preparation of financial statements.
- 2(40) to include balance sheet, profit and loss account/income and expenditure account, cashflow statement, statement of changes in equity and any explanatory note annexed to the above. 3. New section 129 corresponds to existing section 210. It provides that the financial statements shall give a true and fair view of the state of affairs of the company and shall comply with the accounting standards notified under new section 133. 4. It is also provided that the financial statements shall be prepared in the form provided in new schedule III of Companies Act, 2013.
- It may be noted that in the new schedule III the provisions for preparation of balance sheet and statement of profit and loss have been given which are on the same lines as in the existing schedule VI.
- Further, in the new Schedule III detailed instructions have been given for preparation of consolidated financial statements as consolidation of accounts of subsidiary companies is now made mandatory in section 129.
- It may be noted that for the first time a provision has been made in the new section 129(3) that if a company has one or more subsidiaries it will have to prepare a consolidated financial statement of the company and of all the subsidiaries in the form provided in the new schedule III of CompaniesAct,2013.
- The company has also to attack along with its financial statement, a separate statement containing the salient features of the financials of the subsidiary companies in such form as may prescribed by the rules.
- It is also provided that if the company has interest in any associate company or a joint venture the accounts of that company as well as joint venture shall be consolidated.
- For this purpose associate company has been definedinnewsection2(6) company has significant influence i.e. it has. 20% of the total share capital of the company or has control on the business decision under an agreement.
- The Central Government has power to exempt any companies from complying with any of the requirements made under the section