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Ind AS Presentation Format for NBFCs

Ind AS Presentation Format for NBFCs

The Schedule III of the Companies Act, 2013 describes instructions of presenting financial statements of the company as per “Accounting Standards (AS) as well as Indian Accounting Standards (Ind AS)”. In this article, we are going to discuss Ind AS format for NBFCs.


Indian Accounting Standard (Ind-AS) is the Accounting standard adopted by Indian which is issued under the supervision of Accounting Standards Board (ASB). ASB is a committee under Institute of Chartered Accountants of India (ICAI) which consists representatives of the government department, academicians, other professional bodies such as ICAI, representatives from ASSOCHAM, CII, FICCI, etc.

Schedule III of the Companies Act, 2013 is divided into parts, which are as follows:

  • Division I

It applies to a company whose financial statements are finalized based on accounting standards.

  • Division 2

It applies to a company whose financial statements are finalized based on Indian accounting standards (Ind As) other than Non-Banking Financial Companies (NBFCs).

On 30th March 2016, MCA issued Companies (Indian Accounting Standards) (Amendment) Rules, 2016[1], which defined a roadmap for NBFCs regarding the implementation of Indian Accounting Standards (Ind AS).

After this, on 11th October 2018, MCA notified Ind AS Schedule III applicable to NBFCs. With this, new division III has been incorporated under Schedule III which will apply to NBFCs covered under Ind AS applicability.

Ind AS Format for NBFCs
Schedule III for NBFCs

As it is clear from the above, that division III of the Schedule III applies to NBFCs on which Ind AS applies while finalising financial statements. In addition to disclosure requirements, this provision also applies when a company is required to prepare consolidated financial statements.

Balance Sheet Profit and Loss Statement   Statement of changes in equity   Materiality  
The division III of Schedule III provides a balance sheet format and defines minimum disclosure requirements for NBFCs. Along with this, specific disclosure of derivative financial instruments and subordinated liabilities. In the Balance sheet, items are divided into two parts, i.e. financial & non-financial. Under this, NBFC can also avail the option of presenting assets & liabilities in the liquidity order. The main objective behind this is to present users of financial statements the primary goal of NBFCs, policies as well as the process of managing capital.   The division III of Schedule III provides a P/L statement format and defines minimum disclosure requirements for NBFCs. It must disclose items such as “revenue from operations” and “other comprehensive income” on the face of the P/L statement.   This statement will reconcile opening to the closing amount in respect of each component of equity including reserves & surplus along with the items of other comprehensive income. In this statement, NBFCs have to disclose statutory reserves as a part of “other equity”. For the conditions or restrictions for distribution attached to statutory reserves, separate disclosure is required to be given.   It is essential for NBFCs to show all “material” items in financial statements, i.e., the items if they could, individually or collectively, influence the economic decisions that users make based on the financial statements. Materiality depends on the size or nature of the item or a combination of both, to be judged in the particular circumstances.  

NBFCs shall comply with disclosure requirements which are mentioned under schedule III along with the disclosure requirements prescribed under Ind AS. NBFCs will make additional disclosures in notes specified in Ind AS unless required to be disclosed on the face of financial statements. Similarly, in addition to the disclosure requirements mentioned under schedule III, disclosure requirements as specified under Companies Act, 2013 shall be made in notes.

Read our article:IND Accounting Standard Guidelines for NBFC for the Preparation of Financial Statement

Division III requirements for NBFCs

 The division III requirements are similar to the provisions of division II except few which are as follows:

  1. Now, NBFCs can present items of the balance sheet in the order of liquidity;
  2. The balance sheet is required to be classified into financial & non-financial;
  3. NBFCs have to separately disclose in “note” item of other income or other expenditure exceeding 1% of the total income. However, in the case of division II disclosure were required to be given in case of an item of income or expenditure exceeding 1% of the revenue from operations of Rs. 10 Lakhs whichever is higher.
  4. NBFCs have to disclose debts due from LLP under which its director is a partner or member under the head receivables.
  5. NBFCs have to disclose items comprising “revenue from operations” and “other comprehensive income” on the P/L statement.

Significant Change for Ind AS Format for NBFCs

The most significant change is concerned with the classification of “trade receivables” & “loan receivables”. It requires companies to disclose receivables having a considerable increase in credit risk.


It was mandatory for companies implementing Ind AS to comply with the format mentioned under schedule II from the financial year 2016-2017 onwards.

As we know from 1st April 2018, Ind As have become applicable to certain NBFCs therefore from the first quarter thereafter (June 2018) have to report their financials under Ind AS on the basis of Division II, Schedule III and Companies Act, 2013 while divisions III was applicable on NBFCs from the date of its publication in the official gazette as it has not described any specific accounting period.


Soniya Khanna

Soniya is a dedicated legal professional with a flair for reading & writing to keep herself updated with the latest economical developments. She has worked on projects related to IPR & Corporate laws which have given her diversity in work and a chance to blend her subject knowledge with its real-time implementation, thus enhancing her skills.

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