Minimum Requirements Under Ind AS Schedule III: Adding Line Items

Minimum Requirements explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Schedule III prescribes a floor, not a ceiling. What it does not permit is presenting the balance sheet in order of liquidity on the face — the one Ind AS 1 option it takes away.

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What the minimum requirements cover

Ind AS Schedule III sets out the minimum requirements for disclosure on the face of the Balance Sheet, the Statement of Changes in Equity, the Statement of Profit and Loss and the Notes. Cash flow statements are prepared in accordance with the relevant Ind AS.

Where compliance with the Act, including applicable Ind AS, requires any change in presentation or disclosure — addition, amendment, substitution or deletion in a head or sub-head, or any change inter se — that change shall be made and the requirements of Ind AS Schedule III shall stand modified accordingly.

Adding line items above the minimum requirements

Line items, sub-line items and subtotals can be presented as an addition or substitution on the face where the presentation is:

• relevant for understanding the company's financial position or performance;
• needed to cater to industry or sector-specific disclosure requirements; or
• required for compliance with amendments to the Act or under any Ind AS.

The worked example: line items required by para 54 and para 82 of Ind AS 1 should be included, as an addition to or substitution of the Schedule III line items, on the face of the Balance Sheet and the Statement of Profit and Loss respectively. Requirements of both Ind AS Schedule III and Ind AS 1 are to be complied with.

EBITDA and other added measures

Earnings before Interest, Tax, Depreciation and Amortisation is given as the illustration of an addition that is often "an important measure of financial performance relevant to the various users". A company may present it on the face of the Statement of Profit and Loss, provided:

1. the method of computation is followed consistently over the years; and
2. the company discloses the policy followed in the measurement of such line items.

Materiality

Note 7 to the General Instructions, as revised by G.S.R. 463(E) dated 24 July 2020, requires disclosure of items or information that could, individually or collectively, influence the economic decisions that users make — influence arising from information being omitted, misstated or obscured (communicated in a way that has a similar effect).

Materiality depends on the size or nature of the item or a combination of both, judged on particular facts and circumstances. Ind AS 1 para 29 adds that each material class of similar items is presented separately, and items of dissimilar nature or function are presented separately unless immaterial except when required by law.

Where the other disclosures go

Ind AS disclosures — fair value measurement reconciliation, fair value hierarchy, risk management and capital management, interests in other entities, components of OCI, first-time adoption reconciliations — go in the Notes or by way of additional statements unless required on the face. And where any Act or Regulation requires specific disclosures, those are made in addition to the Schedule III requirements.

Common mistakes

• Reading the Schedule III minimum requirements as an exhaustive list.
• Presenting the face of the balance sheet in order of liquidity.
• Showing a liquidity-order presentation in the Notes without labelling it Additional Information.
• Presenting EBITDA without disclosing the measurement policy behind it.