Debentures are displayed under the head In the financial statements of a limited company
Schedule III � General Instructions For Preparation of Balance Sheet and Statement of Profit & Loss of the Company Show
General Instructions
Note � This part of Schedule sets out the minimum requirements for disclosure on the face of the Balance Sheet, and the Statement of Profit and Loss (hereinafter referred to as �Financial Statements� for the purpose of this Schedule) and Notes. Line items, sub-line items and sub-totals shall be presented as an addition or substitution on the face of the Financial Statements when such presentation is relevant to an understanding of the company�s financial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Accounting Standards. PART I � BALANCE SHEET Name of the Company��������. Balance Sheet as at ��������� (Rupees in����)
See accompanying notes to the Financial Statements. Notes: General Instructions for Preparation of Balance Sheet
A. Share Capital For each class of share capital (different classes of preference shares to be treated separately):
B. Reserves and Surplus
C. Long-term Borrowings
D. Other Long-term Liabilities Other Long-term Liabilities shall be classified as:
E. Long-term provisions The amounts shall be classified as:
F. Short-term borrowings
G. Other current liabilities The amounts shall be classified as:
H. Short-term provisions The amounts shall be classified as:
I. Tangible assets
J. Intangible assets
K. Non-current investments
L. Long-term loans and advances
M. Other non-current assets Other non-current assets shall be classified as:
N. Current Investments
O. Inventories
P. Trade Receivables
Q. Cash and cash equivalents
R. Short-term loans and advances
S. Other current assets (specify nature) This is an all-inclusive heading, which incorporates current assets that do not fit into any other asset categories. T. Contingent liabilities and commitments (to the extent not provided for)
U. The amount of dividends proposed to be distributed to equity and preference shareholders for the period and the related amount per share shall be disclosed separately. Arrears of fixed cumulative dividends on preference shares shall also be disclosed separately. V. Where in respect of an issue of securities made for a specific purpose, the whole or part of the amount has not been used for the specific purpose at the balance sheet date, there shall be indicated by way of note how such unutilised amounts have been used or invested. W. If, in the opinion of the Board, any of the assets other than fixed assets and non-current investments do not have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, the fact that the Board is of that opinion, shall be stated. PART II � STATEMENT OF PROFIT AND LOSS Name of the Company��������. Profit and loss statement for the year ended ��������� (Rupees in����)
See accompanying notes to the financial statements. General Instructions for Preparation of Statement of Profit and Loss
Note:� Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements. General Instructions for the preparation of Consolidated Financial Statements
Where do debentures go in financial statements?Debentures don't typically appear as a separate item on a company's balance sheet or other financial statements. Debentures are included as part of long-term debt in the liabilities section of the balance sheet, within the subsection for non-current liabilities (i.e., debt with a maturity date greater than one year).
Why are debentures always shown under the head of long term borrowings?Like the owner's capital, interest is also payable on the principal amount of the debenture. The interest paid is regarded as an expense for the company and is deductible under Income Tax Act. Therefore, debentures are also known as loan capital because they are redeemable after a long period of time.
How are debentures treated in financial statements?Treatment of Interest on Debentures
It is a charge against profit. Interest payment may be subject to tax deducted at source (TDS). We show Interest on Debentures as 'Finance Cost' in Statement of Profit and Loss.
Where is the debentures written in balance sheet?Debentures are the creditors' equity, hence its appears in the liabilities side of the balance sheet under the heading Long-term Liabilities.
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