Question

Under which major head and sub-heads (if any) will the following items be presented in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013? (i) Demand deposits with banks
(ii) Long-term loans
(iii) Livestock

Hint:

As per Schedule III:

• Cash and Cash Equivalents include: Cash in hand, cheques in hand, balance with banks (including demand deposits)
• Long-term Loans and Advances: Loans given for >12 months
• Property, Plant and Equipment: Tangible assets held for use in business (including livestock used for operations)

Always consider the nature and purpose of the asset for correct classification!

Answer 1

Classification as per Schedule III, Part I of the Companies Act, 2013

Step 1: Structure of Balance Sheet as per Schedule III

• EQUITY AND LIABILITIES
  • Shareholders' Funds
    • Share Capital
    • Reserves and Surplus
    • Money received against share warrants
  • Share Application Money Pending Allotment
  • Non-Current Liabilities
    • Long-term borrowings
    • Deferred tax liabilities (Net)
    • Other long-term liabilities
    • Long-term provisions
  • Current Liabilities
    • Short-term borrowings
    • Trade payables
    • Other current liabilities
    • Short-term provisions
• ASSETS
  • Non-Current Assets
    • Property, Plant and Equipment
    • Intangible assets
    • Capital work-in-progress
    • Intangible assets under development
    • Non-current investments
    • Deferred tax assets (Net)
    • Long-term loans and advances
    • Other non-current assets
  • Current Assets
    • Current investments
    • Inventories
    • Trade receivables
    • Cash and cash equivalents
    • Short-term loans and advances
    • Other current assets

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Step 2: Classification of Given Items

(i) Demand Deposits with Banks

• Withdrawable on demand (e.g., savings or current accounts).
• Highly liquid in nature.
• Major Head: Current Assets
• Sub-head: Cash and Cash Equivalents

(ii) Long-term Loans

• Loans repayable after more than 12 months from the reporting date.
• Not expected to be realized within the operating cycle.
• Major Head: Non-Current Assets
• Sub-head: Long-term Loans and Advances

(iii) Livestock

• Animals held for breeding, production, or sale.
• If used in operations (e.g., dairy animals) → treated as fixed assets.
• If held for sale → treated as inventory.
• In absence of specific information, generally classified as operational asset.
• Major Head: Non-Current Assets
• Sub-head: Property, Plant and Equipment

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Final Classification Table

Item	Major Head	Sub-head
Demand deposits with banks	Current Assets	Cash and Cash Equivalents
Long-term loans	Non-Current Assets	Long-term Loans and Advances
Livestock	Non-Current Assets	Property, Plant and Equipment