ICAI Guidance Note on Ind AS Compliance by NBFCs: Division III of Schedule III to the Companies Act 2013
ICAI has issued Guidance Note on Ind AS Compliance by NBFCs, for preparation and presentation of Financial Statements in line with requirements of Division III of Ind AS Schedule III (Companies Act 2013), as amended by MCA in October 2018.
MCA has earlier notified the formats of Division III to Schedule III pertaining to Non-Banking Financial Companies (NBFCs) that are required to comply with Indian Accounting Standards (Ind AS). In October, 2018, MCA has amended the Division III to Schedule III (Companies Act, 2013) to prescribe the revised formats of Financial Statements as well as Disclosure Requirements for Non Banking Financial Companies (NBFCs) which are required to comply with the Indian Accounting Standards (Ind AS).
The revised formats of Division III have brought changes with regard to the classification of trade payables, trade receivables and loan receivables. Also, with the amendments, there is change in the terminology of Schedule III to align it with Ind AS. As the Ind AS has become applicable on NBFCs that fall within the prescribed criteria w.e.f. 1st April, 2018, with the prescription of Division III to Schedule III, the presentation of the financial results will be in line with the Indian Accounting Standards.
In light of the changes to Division III to Schedule III, ICAI has issued the Guidance Note on Division III of Ind AS Schedule III (Companies Act 2013) for providing appropriate guidance to NBFCs, Members and other stakeholders so that the requirements of Ind AS Compliance under Schedule III can be fulfilled by the NBFCs which are required to prepare their financial statements as per Ind AS in letter and spirit. Detailed notes have also been provided on various items of the Schedule III and issues and intricacies involved therein which will surely help the readers.