MCA publishes clarifications on the obligation for companies to round the figures appearing in the financial statements
The Ministry of Corporate Affairs ( MCA ) has issued a clarification on the obligation for companies to round the figures appearing in the financial statements.
The MCA has stated that, Amendment to Schedule III of the Companies Act, 2013 voids MCA GSR Notification. 207(E) of March 24, 2021 requires companies to round figures in financial statements according to their total revenues. However, if companies provide absolute numbers in electronic forms, ie. AOC-4, this will not be considered an incorrect certification by Professionals.
Form AOC 4 is used to file financial statements for each year with the Registrar of Companies (ROC). In the case of consolidated financial statements, the company must file the AOC 4 CFS.
Financial statements are official records of the financial transactions and position of the company. Financial statements provide the true business of a company to shareholders and investors. The fundamental purpose of financial statements is to provide information about the financial health, growth and changes in a company’s financial position that will be useful to a wide range of stakeholders in making business decisions.
The financial statements prepared and filed annually are the Board’s most important means of communication with its shareholders. Mandatory disclosures through financial statements, including the report of the board of directors and the auditor’s report, are a method of providing information to shareholders and the public about the financial activities and condition of the company.
Financial statements are useful to all stakeholders, investors and financial institutions as they provide the true position of the business and help in making informed decisions.
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