Recently the ministry of corporate affairs has rolled some important and major MCA amendments under the companies act 2013. Here in this post, we will entail all the relevant changes and amendments in 3 steps for a better understanding to all the tax experts. Check out the MCA amendments under the company act in the given below list:
Modifications to Accounting Software Having Audit Trail
(i) It is now mandatory for every company to use the accounting software that has an audit trail of every transaction besides the original transactions that were edited or deleted. The same need is subjected to apply from the date 1st April 2021.
(ii) Applicability of the same provision is postponed for 1 year, thus it is now applicable to start from the date 1st April 2022 for the fiscal year ending March 31, 2023.
New Changes for Preparation of the Financial Statement (Schedule III)
(I) “Disclosure” for the shareholding of the promoters
(ii) Trade “Payables” in the following ageing:- (a) From 0 to 1 Year (b) From 1 to 2 Year (c) From 2 to 3 Year (d) From 3 to Infinite years
(iii) “Reconciliation” of the gross and net (WDV) having amounts of every class of the assets
(iv) Trade “Receivables” in the following ageing:- (a) From 0 to 1 Year (b) From 1 to 2 Year (c) From 2 to 3 Year (d) From 3 to Infinite years
(v) “Disclosure” for title deed of the Immovable Property “not” held in name of the Company.
(vi) “Disclosure” for revaluation of the fixed assets and Capital Work in Progress (CWIP) age-wise.
(vii) “Disclosure” for Loans or Advances as allowed to the promoters, directors, KMPs, and other corresponding parties.
(viii) Disclosure for the proceedings started or still due beneath the Benami transactions (prohibition) act, 1988 towards the Benami properties.
(ix) “Reconciliation” amid the quarterly/monthly statements of the stock under the books and submitted to the bank. Indeed to provide the reasons for the material differences.
(x) “Disclosure” towards showing willful defaulter via bank or financial Institution
(xi) “Disclosure” towards the relationship with any struck-off company.
(xii) Disclosure for due registration of charges or due satisfaction with the Registrar of Companies (ROC) above statutory limits.
(xiii) “Disclosure” for compliances beneath the layer of companies.
(xiv) “Disclosure” for the following 11 Ratios:-(a) Current Ratio
- (b) Debt-Equity Ratio
- (c) Debt Service Coverage Ratio
- (d) Return on Equity Ratio
- (e) Inventory turnover ratio
- (f) Trade Receivables turnover ratio
- (g) Trade payables turnover ratio
- (h) Net capital turnover ratio
- (i) Net profit ratio
- (j) Return on Capital employed
- (k) Return on investment
(xv) “Disclosure” towards the compliance with the approved schemes of the arrangements and deviation as per the standard if there is any.
(xvi) “Disclosure” towards the transaction as not recorded in the books accounts however has been shown as the income in the tax assessments.
(xviii) “Disclosure” for the Corporate Social Responsibility (CSR)
(xix) “Disclosure” for the Crypto Currency or Virtual Currency employed by the company.
(xx) “Rounding” of the figures in the financial statements is now essential and also is to rely on the total income in place of the total turnover.
(xxi) “Disclosure” for the current maturities (within12 months) with respect to the long-term borrowings.
(xxii) “Disclosure” for the security deposits provided is to be furnished beneath the authority “other noncurrent assets” in place of long term and the advance.
(xxiii) “Disclosure” towards the usage with respect to the borrowed funds excluding for the goal it was borrowed.
(xxiv) “Disclosure” for the revaluation of the property plant and equipment (PPE) through the registered valuer.
(xxv) “Disclosure” for the intangible assets beneath the development age-wise.
(xxvi) “Disclosure” towards the borrowed funds towards the purpose of additional lending, investment, guaranty, or security to the third parties.
(xxvii) The same revisions are subjected to apply from the date 1st April 2021. Thus the same is subjected to apply for the financial statements for the year ending March 31, 2022.
Read Also: Simplified All Features of Monopoly with Its Types for CS
Relevance of the CARO 2020
- (i) CARO 2020 is having 21 clauses which CARO 2016 is having 16 clauses
(ii) CARO 2020 is having 7 “new” clauses, in which 1 clause of CARO 2016 is deleted and 1 clause of CARO 2016 is merged. Hence 16 “old” clauses + 7 “new” clauses – 1 “old” clause is deleted – 1 “old” clause is merged= 21 “new” clauses - (iii) CARO 2020 is appropriate from the date April 01, 2021. Thus it is applicable for the financial statements for the year ending March 31, 2022
