In this article, we are discussing the format of profit & loss account statement of the company and general instructions as per companies act 2013 for the preparation of the final account of companies, which is essential for companies and useful for commerce and management students.
Format of the statement of profit and loss Account as per companies Act 2013
The format of statement of profit and loss account of a company is prescribed in part II of schedule III of The Companies Act 2013 as follows
PART II- FORM OF PROFIT AND LOSS
NAME OF THE COMPANY…..
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED 31ST MARCH,…………….
|particulars||Note no||Figures for the current reporting period||Figures for the previous reporting period|
|I. Revenue from operations
|ii. Other income|
Cost of materials consumed
Purchases of stock in trade
Change in inventories of finished goods, work in progress and stock in trade
Employee benefit expenses
Depreciation and amortization
|V. Profit before exceptional and extraordinary items and tax(iii-iv)|
|Vi. Exceptional items|
|Vii. Profit before extraordinary items and tax(vii-viii)|
|Viii. Extraordinary items|
|Ix. Profit before tax(vii-viii)|
|X. Tax expense :
2) deferred tax
|Xi. Profit/(loss) for the period from continuing operations(ix-x)|
|Xii. Profit/(loss) from discontinuing operations|
|Xiii. Tax expense of discontinuing operations|
|Xiv. Profit/(loss) from discontinuing operations(after tax)(xii-xiii)|
|Xv. Profit/(loss) for the period(xi+xiv)|
|Xvi. Earnings per equity share:
General instructions for preparation of the statement of profit and loss Account as per companies act 2013:
- The provisions of this Part shall apply to the income& expenditure A/C referred to in sub-clause (ii) of clause (40) of section 2 in like manner as they apply to a statement of profit and loss.
- Revenue from operations:(a)In respect of a company other than a finance company revenue from operations shall disclose separately in the notes revenue from
- Sale of products;
- Sale of services
- 0Other operating revenues; less
- Excise duty
(b). In respect of a finance company, revenue from operations shall include revenue from
- Interest: and
- Other financial services
Revenue under each of the above heads shall be disclosed separately by way of notes to accounts to the extent applicable.
- Finance costs: finance costs shall be classified as:
. a) interest expense
b) Other borrowing costs
C) Applicable net gain /loss on foreign currency transactions and translation
4) Other income: other income shall be classified as.
- Interest income (in case of a company other than a finance company):
- Dividend income:
- Net gain/loss on the sale of investments
Other non-operating income(net of expenses directly attributable to such income)
5) Additional information: a company shall disclose by way of notes additional information regarding aggregate expenditure ad income on the following items::
- A) employee benefits expense(showing separately)
- Salaries and wages
- Contribution to provident ad other funds
- Expense on employee stock option scheme(ESOP) and employee stock purchase plan’
- Staff welfare expenses
B). Depreciation and amortization expenses:
C)Any item of income or expenditure which exceeds 1% of the revenue from operations rs. 1,00,000, whichever is higher;
F)Net gain/loss on the sale of investments;
G)Adjustments to the carrying amount of investments;
H)Net gain or loss on foreign currency transactions and translation( other than considered as finance cost);
I) Payment to the auditor as (a) auditor, (b) for taxation matters,©for company law matters,(d) for management services, (e) for other services, (f) for reimbursement of expenses;
J)Details of items of exceptional and extraordinary nature;
K)Prior period items;
2. A. In the case of manufacturing companies,
- Raw materials under broadheads,
- Goods purchased under broadheads,
B. In the case of trading companies, purchases in respect of goods traded in by the company under broadheads;
C. In the case of a company rendering or supplying services, gross income derived from services rendered or supplied under broadheads.
D. In the case of a company, which falls under more than one of the categories mentioned in A, B, and C above, it shall be sufficient compliance with the requirement herein if purchases, sales and consumption of raw material and the gross income from services rendered is shown under broadheads.
E. In the case of other companies, gross income derived under broadheads.
3). in the case of all concerns having worked in progress, works in progress under broadheads.
4). (a) the aggregate, if material, of any amounts set aside, to reserve, but not including provisions made to meet any specific liability, contingency, or commitments known to exist at the date as to which the balance sheet is made up.
(b). the aggregate, if material, of any amounts withdrawn from such reserves.
5) (a) the aggregate, if material, of the amounts set aside to provision made for meeting specific liabilities, contingencies or commitments.
(b). the aggregate, if material, of the amounts withdrawn from such provisions, as no longer required.
6).expenditure incurred on each of the following items, separately for each them:
- consumption of stores and spare parts,
- Power and fuel
- Repairs to buildings
- Rates and taxes, excluding, taxes on income
- Miscellaneous expenses
7. (a) dividends from subsidiary companies
(b) provisions for losses of subsidiary companies.
8). the profit and loss account shall also contain by way of note the following information:
(a) value of imports calculated on C.I.F basis by the company during the financial year in respect of
- Raw materials,
- Components and spare parts:
- capital goods
(b). expenditure in foreign currency during the financial year on account of royalty, know-how, professional and consultation fees, interest and other matters:
©. total value if all imported raw materials, spare parts and components consumed during the financial year and the total value of all indigenous raw materials, spare parts and components similarly consumed and the percentage of each to the total consumption:
(d) the amount remitted during the year in foreign currencies on account of dividends with a specific mention of the total number of non-resident shareholders, the total number of shares held by them on which the dividends related:
(e) earnings in foreign exchange classified under the following heads:
- Export of goods calculated on F.O.B(freight on board) basis:
- Royalty, know-how, professional, and consultation fees:
- Interest on the dividend;
- Other income, indicating the nature thereof.