Schedule III (Part I) – Format of Balance Sheet (Equity & Liab)
Introduction
The "Equity and Liabilities" side is the First Part of the Vertical Balance Sheet. It shows the sources of funds: Owner's Funds (Equity) and Outsider's Funds (Liabilities).
1. The Format (Equity & Liability Side)
| Note No. | Particulars | Figures at end of Current Period | Figures at end of Prev Period |
|---|---|---|---|
| I. | EQUITY AND LIABILITIES | ||
| (1) | Shareholders' Funds | ||
| (a) | Share Capital | (Amount) | (Amount) |
| (b) | Reserves and Surplus | (Amount) | (Amount) |
| (c) | Money received against share warrants | (Amount) | (Amount) |
| (2) | Share Application money pending allotment | (Amount) | (Amount) |
| (3) | Non-Current Liabilities | ||
| (a) | Long-term Borrowings | (Amount) | (Amount) |
| (b) | Deferred Tax Liabilities (Net) | (Amount) | (Amount) |
| (c) | Other Long-term Liabilities | (Amount) | (Amount) |
| (d) | Long-term Provisions | (Amount) | (Amount) |
| (4) | Current Liabilities | ||
| (a) | Short-term Borrowings | (Amount) | (Amount) |
| (b) | Trade Payables | (Amount) | (Amount) |
| (c) | Other Current Liabilities | (Amount) | (Amount) |
| (d) | Short-term Provisions | (Amount) | (Amount) |
| TOTAL | (Total) | (Total) |
2. Key Classifications
A. Share Capital
- Includes Equity and Preference.
- Note: Authorized, Issued, Subscribed, Called-up, and Paid-up capital must be shown in notes.
- Calls in Arrears is DEDUCTED here.
B. Reserves and Surplus
- Capital Reserve, Securities Premium, General Reserve.
- Surplus: Balance in Statement of Profit & Loss (Accumulated Profits).
- (Negative Balance of P&L is shown here as a deduction, NOT on Asset side).
C. Long-term Borrowings
- Debentures, Bonds, Term Loans (Bank).
D. Trade Payables
- Creditors + Bills Payable.
E. Other Current Liabilities
- Current maturities of Long-term debt (e.g., Debentures redeeming this year).
- Interest accrued but not due.
- Unclaimed Dividend.
- Calls in Advance.
3. Contingent Liabilities (Footnote)
Items that are NOT in the Balance Sheet total but shown in Notes:
- Claims against company not acknowledged as debt.
- Guarantees given by company.
- Arrears of Dividend on Cumulative Preference Shares.
Exam Notes: Writing the Answer
Question: "Where is 'Unclaimed Dividend' shown?" (2 Marks)
Answer: Current Liabilities -> Other Current Liabilities.
Question: "Where is 'Debit Balance of P&L Statement' shown?"
Answer: Shareholders' Funds -> Reserves and Surplus (As a negative figure). It is NOT a Fictitious Asset.
Question: "Where is 'Proposed Dividend' shown?"
Answer: As per AS-4 (Revised), Proposed Dividend is a Contingent Liability (shown in Notes). It is NOT a Current Liability until declared in AGM.
Summary
- 4 Main Heads: Shareholders' Funds, Share App Pending Allotment, Non-Current Liab, Current Liab.
- Negative P&L: Reserves & Surplus.
- Debentures: Long-term Borrowings.
Quiz Time! 🎯
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