The Schedule III balance sheet

Companies prepare their balance sheet in the vertical form set by Schedule III of the Companies Act, 2013. It has two parts:

• I. Equity and Liabilities (what is owed): shareholders' funds (share capital, reserves and surplus); share application money pending allotment; non-current liabilities; current liabilities.
• II. Assets (what is owned): non-current assets; current assets.

Details go into the Notes to Accounts, figures are rounded according to the company's turnover, and the previous year's figures are shown beside the current ones. The old words 'sundry debtors' and 'sundry creditors' are now trade receivables and trade payables.

The share capital note shows: authorised capital; issued capital; subscribed capital, split into fully paid and not fully paid (with calls in arrears deducted); then forfeited shares added. It also lists shareholders holding more than 5%.

Reserves and surplus include: capital reserve, capital redemption reserve, securities premium, debenture redemption reserve, revaluation reserve, share options outstanding, other reserves (such as general reserve), and the surplus (the balance of the statement of profit and loss). A debit balance of that statement is shown as a negative figure under reserves and surplus, even if the total becomes negative.

Example: 20,000 shares of ₹10 are issued and fully called; 1,000 shares have not paid the final ₹3. Share capital = 2,00,000 − 3,000 = 1,97,000.