Format for Financial Statements to be Prepared by the Non-Corporate Entities
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- Last Updated on 18 March, 2023
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Financial Statements form the backbone for financial planning, analysis, benchmarking, and decision making. They provide the information about financial position, performance, and cash flows of an enterprise being useful for a wide range of users in making economic decisions. Users of the financial statements such as present and potential investors, employees, lenders, suppliers, other trade creditors, and customers, need financial information of the reporting entities to make various economic decisions.
But, the preparation of these financial statements further depends upon the structure of the organization. As there is a varied number of entities (corporate or non-corporate), formed to carry out business, commercial or other economic and social activities, such as:
A. Sole proprietorship firms
B. Hindu Undivided Family
C. Partnership Firms
D. Association of Persons
E. Society registered under any law for the time being in force
F. Trust (private or public)
G. Statutory Corporations, Autonomous bodies, and Authorities
H. Any other form of organization
Hence, depending upon the structure of a particular entity, the format for the presentation of financial statements is decided. Like, the financial statements of the companies are prepared in accordance with Schedule III prescribed under the Companies Act, 2013, and the same is further categorized into Division I, Division II, and Division III entities. Hence, where the entities are governed by any particular statute then the financial statement of that entity is prepared in accordance with the provisions specified in the relevant statute.
Further, the provisions of that relevant statute also state the set of Accounting Standard that may be applied to a particular entity. At present, there are three sets of Accounting Standards:
A. Indian Accounting Standards (Ind AS) for a specified class of companies;
B. Accounting Standards (AS) notified under Companies (Accounting Standards) Rules, 2021, for companies other than those following Ind AS;
C. Accounting Standards (AS) prescribed by ICAI for entities other than companies.
Entities other than companies, means non-corporate entities. For the applicability of Accounting Standards to these non-company entities, the ICAI has prescribed the criteria classifying non-company entities into four levels, viz-a-viz, Level I, Level II, Level III and Level IV non-company entities. All Business or Professional Entities, other than Companies incorporated under the Companies Act and Limited Liability Partnerships incorporated under Limited Liability Partnership Act are considered to be Non-Corporate entities.
The corporate or Company form of legal structure is the most commonly used one for commercial or business activities and they have the prescribed Schedule III providing the set format for the preparation of financial statements. However, for the preparation of financial statements of non- corporate entities, the Accounting Standard Board (ASB) of ICAI has provided the recommendatory format for the presentation of financial statements. The same shall be provided in the manner below:
1. For preparation of Balance Sheet and Statement of Profit and Loss of a non-corporate entity formats has been recommended. However, in case where, compliance with the requirements of the relevant statute applicable to the non-corporate entity require any change in treatment or disclosure in the head or sub-head or any changes, inter se, in the financial statements or statements forming part thereof, the same shall be made and the formats shall be modified accordingly.
2. Any disclosure requirement which are recommended in formats are not treated as substitution of the disclosure requirements specified in the Accounting Standards rather, they used as in addition accounting standards issued by ICAI.
3. Information in addition to that presented in the Financial Statements may contain in notes to accounts and may provide where required
(a) narrative descriptions or disaggregation’s of items recognized in those statements; and
(b) information about items that do not qualify for recognition in those statements
4. While preparing financials, every item of Balance Sheet and Statement of Profit and Loss shall be cross-referenced to any related information in the notes to accounts. A balance shall be maintain between those information which provides excessive detail that may not assist users of financial statements and not providing important information.
5. In non-corporate entities, expending upon the Total Income, the figures appearing in the Financial Statements may be rounded off as given below:—
(a) less than one hundred crore rupees to the nearest hundreds, thousands, lakhs or millions, or decimals thereof.
(b) one hundred crore rupees or more to the nearest lakhs, millions or crores, or decimals thereof.
6. The unit of measurement once used, shall be uniformly used throughout the financial statements.
7. The comparatives figures of previous financial period shall also be provided while preparing the financial statements. However, in case the financial statements are provided for the first time, this condition of providing comparatives does not apply.
Format of balance sheet for non-corporate enterprise
Part I – Form of Balance Sheet
Name of the Non-Corporate Entity…………….
Balance Sheet as at ………………
(Rupees in………)
|
Particulars |
Note No |
Figures as at the end of (Current reporting period) (in Rs.) __________ (DD/MM/YYYY) |
Figures as at the end of (Previous reporting period) (in Rs.) __________ (DD/MM/YYYY) |
|
| 1 | 2 | 3 | 4 | |
| I. | EQUITY AND LIABILITIES | |||
| (1) Owners’ Fund | ||||
| (a) Owners Capital Account | ||||
| (b) Reserves and surplus | ||||
| (2) | Non-current liabilities | |||
| (a) Long-term borrowings | ||||
| (b) Deferred tax liabilities (Net) | ||||
| (c) Other Long term liabilities | ||||
| (d) Long-term provisions | ||||
| (3) | Current liabilities | |||
| (a) Short-term borrowings | ||||
|
(b) Trade payables:- (A) total outstanding dues of micro, small and medium enterprises and (B) total outstanding dues of creditors other than micro, small and medium enterprises . |
||||
|
(c) Other current liabilities (d) Short-term provisions |
||||
| TOTAL | ||||
| II. | ASSETS | |||
| (1) | Non-Current Assets | |||
| (a) Property, Plant and Equipment and Intangible assets | ||||
| (i) Property, Plant and Equipment | ||||
| (ii) Intangible assets | ||||
| (iii) Capital work-in- progress | ||||
| (iv) Intangible assets under development | ||||
| (b) Non-current investment | ||||
| (c) Deferred tax assets (net) | ||||
| (d) Long-term loans and advances | ||||
| (e) Other non-current assets | ||||
| (2) | Current assets | |||
| (a) Current investments | ||||
| (b) Inventories | ||||
| (c) Trade receivables | ||||
| (d) Cash and bank balances | ||||
| (e) Short-term loans and advances | ||||
| (f) Other current assets | ||||
| TOTAL |
Format of statement of profit and loss for non-corporate enterprise
Part II – Form of Statement of Profit and Loss
Name of the Non-Corporate Entity…………………….
Statement of Profit and loss for the year ended ………………………
(Rupees in …………..)
|
Particulars |
Note |
Figures for the current reporting period (in) From ________ (DD/MM/YYYY) To __________ (DD/MM/YYYY) |
Figuresforthe previous reporting period (in) From__________ (DD/MM/YYYY) To____________ (DD/MM/YYYY) |
|
| 1 | 2 | 3 | 4 | |
| I. | Revenue from operations | xxx | xxx | |
| II. | Other income | xxx | xxx | |
| III. | Total Income (I + II) | xxx | xxx | |
| IV. | Expenses | |||
| (a) | Cost of Goods Sold | |||
| (b) | Employee benefits expense | xxx | xxx | |
| (c) | Depreciation and amortization expense | xxx | xxx | |
| (d) | Finance Cost | xxx | xxx | |
| (e) | Other expenses | xxx | xxx | |
| Total expenses | xxx | xxx | ||
| V | Profit before exceptional and extraordinary items | xxx | xxx | |
| and tax (III-IV) | ||||
| VI | Exceptional items | xxx | xxx | |
| VII | Profit before extraordinary items and tax (V – VI) | xxx | xxx | |
| VIII | Extraordinary Items | xxx | xxx | |
| IX | Profit before tax (VII- VIII) | xxx | xxx | |
| X | Tax expense: | |||
| (i) | Current tax | xxx | xxx | |
| (ii) | Deferred tax | xxx | xxx | |
| XI | Profit (Loss) for the period from continuing operations (VII-VIII) | xxx | xxx | |
| XII | Profit/(loss) from discontinuing operations | xxx | xxx | |
| XIII | Tax expense of discontinuing operations | xxx | xxx | |
| XIV | Profit/(loss) from Discontinuing operations (after tax) (XII-XIII) | xxx | xxx | |
| XV | Profit/ (Loss) (XI + XIV) | xxx | xxx |
The format recommended for preparation of financial statements by Non- Corporate Entities, also provides the details of accompanying notes that forms part of the financial statements.
Note: This document has been prepared in accordance with the implementation guide on ” Financial Statements of Non- Corporate Entities” provided by ICAI
To refer the complete guidance note Click Here
Dive Deeper:
Know all about the Financial Statements of Companies
Introduction to Final Accounts and Accounting Treatment
Accounting – Meaning and its Basic Concepts
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Thanks for finally writing about > Format for Financial Statements to be Prepared by the
Non-Corporate Entities
FROM WHICH YEAR, IT IS APPLICABLE ?
Hi Sir, To bring consistency and comparability in the presentation and disclosure of financial information reported by the noncorporate entities, the format for preparation of financial statements by non- corporate entity was recommended by ICAI and hence, does not provide any mandatory date for its applicability.
Sir Kindly send the new format of balance sheet for non-corporate enterprise in excel sheet.
Hi Sir, The accounting standard board (ASB) of ICAI has already issued an excel format of the illustrative financial statements of Non-Corporate Entities.