Question

Classify the following items under major heads and sub-heads (if any) in the Balance Sheet of the company as per Schedule III Part I of the Companies Act 2013:

(i) Vehicles
(ii) Provision for taxation
(iii) Work in progress

Hint:

Vehicles are fixed tangible assets. Provision for taxation is a short term provision. Work in progress is part of inventories.

Answer 1

Step 1: Recall the rule:
Schedule III, Part I of the Companies Act, 2013 gives the Balance Sheet of a company in a fixed format. Every item sits under a major head (such as Non-Current Assets or Current Liabilities) and then under a sub-head. The 12 months from the Balance Sheet date decide whether an item is current or non-current.

Step 2: Classify Vehicles.
Vehicles are tangible assets bought to be used in the business for many years, not to be sold. Long-term assets of this kind are non-current. Tangible fixed assets are shown as property, plant and equipment.
Major head: Non-Current Assets. Sub-head: Property, Plant and Equipment and Intangible Assets.

Step 3: Classify Provision for taxation.
A provision is a liability set aside for a known expense whose exact amount is not fixed. Tax for the year is payable within 12 months, so it is current. Schedule III shows it as a short term provision.
Major head: Current Liabilities. Sub-head: Short Term Provisions.

Step 4: Classify Work in progress.
Work in progress is goods that are partly made and not yet complete. They will be completed and sold within the operating cycle. Schedule III shows raw materials, work in progress and finished goods as inventories.
Major head: Current Assets. Sub-head: Inventories.

Step 5: Summary table:

Item	Major head	Sub-head
Vehicles	Non-Current Assets	Property, Plant and Equipment and Intangible Assets
Provision for taxation	Current Liabilities	Short Term Provisions
Work in progress	Current Assets	Inventories

Final Answer:
Vehicles: Non-Current Assets - Property, Plant and Equipment and Intangible Assets; Provision for taxation: Current Liabilities - Short Term Provisions; Work in progress: Current Assets - Inventories.