Introduction to Corporate Accounting, Financial Statements

Corporate Accounting is an important topic for the CS Exam . For sole proprietorships and partnerships, there's no law saying they have to make final accounts. But for companies, it's different. They're legally required to keep good records and prepare final accounts every year. This is all laid out in Chapter IX, Sections 128 to 138 of the Companies Act, 2013.

What is Corporate Accounting?

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Financial Statements

Also Read: Interpretation of Statutes for CS Executive

Schedule III of the Companies Act, 2013

PART I – Form of Balance Sheet

Part II – Form of Statement of Profit and Loss

• Employee Benefits and Expenses: Detailed reporting of costs related to employee benefits, including salaries, pensions, and other employee-related expenses.
• Income Items: Includes all income streams of the company, categorizing them appropriately to reflect the business operations.
• Materials, Goods, Services: Disclosure of expenses related to materials, goods purchased, and services utilized during the financial period.
• Works-in-Progress: Reporting on the status and valuation of ongoing projects or unfinished goods.
• Reserves – Creation & Utilization: Details the formation and usage of reserves, providing insights into the company’s financial strategies for future stability and growth.
• Provision – Creation & Utilization: Involves setting aside funds for anticipated liabilities and contingencies.
• Expenses: Itemized disclosure of significant expenses such as marketing, R&D, and administrative expenses.
• Subsidiaries Information: Financial data and performance metrics of subsidiary companies.
• Forex Information: Impacts of foreign exchange fluctuations on financial performance.
• Undisclosed Income: Any income not recorded in regular financial statements.
• Corporate Social Responsibility (CSR): Reporting on initiatives and expenditures related to CSR activities.
• Details of Crypto or Virtual Currency: Inclusion of any transactions or holdings in cryptocurrencies or virtual currencies.

XBRL (Extensible Business Reporting Language)