1. Financial Accounting Lecture 13

2. Current Assets Comp Ordinance 1984 Fourth Schedule

3. Stocks / Inventory
Raw Material
Finished Goods
Work in Process
General Stores / Spares
Tools
Marketable Securities
Loans and Advances
Cash and Bank Balances

4. Current assets shall be classified under sub-heads appropriate to the company’s affairs, including, where applicable, the following:

5. General Stores and spare parts distinguishing, where practicable, each from the other.
Loose tools Moulds / Dies.

6. Stock-in-trade, distinguishing where practicable, between
stock of raw materials and components
work in progress
stock of finished products and
other stocks

7. In the case of above three sub-heads, the respective basis of valuation shall be stated.

8. If the basis such as “cost”, “net realizable value” or cost or net realizable value whichever is lower” is given, there shall also be given to the extent practicable a general indication of the method of determining the “cost” or “net realizable value” e.g., “average cost”, “first-in, first out” or “last in, first out”.

9. Where the basis is of valuation involves departure from the recognized accounting principles, the reasons there for along with financial impact.

10. Trade debts which shall include amounts due in respect of goods sold or services rendered or in respect of other contractual obligations but shall not include the amounts which are in the nature of loans or advances.

11. Classification of Debt:
Debts considered good and debts considered doubtful or bad shall be separately stated.
Debts considered good shall be distinguished between those which are secured and those for which the company holds no security other than the debtor’s personal security.

12. Loans and advances due for repayment within a period of twelve months from the date of the balance-sheet.
Showing separately those considered good and those considered doubtful or bad debts.

13. Trade deposits and short term prepayments and current account balances with statutory authorities.
Bills receivable.
Marketable securities, other than long-term investments.

14. Interest accrued or interest outstanding.
Other receivables specifying separately the material items.
tax refunds due from Governments, showing separately excise duties, customs duties, sales tax, income tax etc.

15. Cash and bank balances, distinguishing between.
Cash in hand,
Cash in transit and
balance with banks indicating the nature thereof, e.g., on current or deposit account
Amounts required to be kept in special or separate accounts under any law shall be shown separately.

16. In case of trade debts, loans and advances and other receivables following information shall also be disclosed.
The aggregate amount due by directors, chief executive, and executives of the company and any of them severally or jointly with any other person.
aggregate amount due by associated undertakings, controlled firms and managed modarabas, names to be specified in each case.

17. the maximum amount of debts under each of the preceding items, at any time since the date of incorporation or since the date of the previous balance-sheet, whichever is the later. Such maximum amounts to be calculated by reference to month-end balance.

18. Provision, if any, made for diminution in the value of or loss in respect of any current asset shall be shown as deduction from the gross amount of the respective assets.

19. If in the opinion of the directors any of the current assets have, on realization in the ordinary course of the company’s business, a value less than the amount at which they are stated in the financial statements, a disclosure of the fact that the directors are of that opinion together with their estimates of the realizable value and the reasons for assigning higher values in the balance-sheet shall be required.

20. Current Assets – Disclosures (Samples)
Stores and Spares – Policy Note
Stores and spares are valued at lower of cost or net realizable value. Cost is calculated using weighted average method. Stores in transit are valued at invoice value.
Notes to the accounts
Notes
Stores and Spares
Stores xxx xxx
Spares xxx xxx
Stores in Transit xxx xxx

21. Current Assets – Disclosures (Samples)
Trade Debtors
Notes to the accounts
Notes
Secured xxx xxx
Unsecured – Considered Good
Associated Undertakings xxx xxx
Others xxx xxx
xxx xxx
– Considered Doubtful xxx xxx
Less provision for doubtful debts xxx xxx
xxx xxx

22. Current Assets – Disclosures (Samples)
The maximum aggregate amount at the end of any month during the year from associated undertaking was Rs. xxxx.

23. Current Assets – Disclosures (Samples)
Advances, Receivables, Prepayments and other Receivables
Notes to the accounts
Notes
Advances – considered good
Executives xxx xxx
Other Employees xxx xxx
xxx xxx
Suppliers of goods – Considered Good
Security deposits xxx xxx
Prepayments xxx xxx
Due from associated undertaking xxx xxx

24. Current Assets – Disclosures (Samples)
Other Receivables
Considered Good xxx xxx
Considered Doubtful xxx xxx
Less Provision for doubtful
balances xxx xxx
xxx xxx
No advances were given to the directors of the company.
The maximum aggregate amount at the end of any month during the year from associated undertaking was Rs. xxxx.

25. Current Assets – Disclosures (Samples)
Cash and Bank Balances
Notes to the accounts
Notes
Cash at Bank
Current accounts xxx xxx
Saving accounts xxx xxx
xxx xxx
Cash in Hand xxx xxx