Financial Statements of a Company Test 13

An amount which were earlier written off in books of account as bad debts has given an adverse impact on the Profit & Loss account. Hence recovery of the same amount has to be considered as Misc. Income.

When we say that a company has perpetual existence we mean its continuity is not affected by the change in its membership. Perpetual succession means that the members may come and go but the company will go on forever. The death, insanity, bankruptcy of members will not affect the existence of the company. This also justifies the concept of going concern.

Authorised capital or registered capital  or nominal capital of a company is the amount of share capital that the company is authorised to raise capital through public. Basically the capital that is registered in the memorandum of association of the company. The company cannot raise money beyond the Authorised capital or registered capital  or nominal capital so registered. 

1 copy of the financial statements are required to be submitted to the registrar of companies 30 days before the annual general meeting is held. The registrar will verify the financial statements before they are submitted in the AGM.

Divisible profit is that part of profit which is available with the company for distribution of reserves. Development rebate reserve is created out of development rebate and securities premium and forfeited shares are reserves made out of capital profit hence, are not divisible profit. 

• Companies Act, 2013 specified useful life to compute depreciation under schedule II in part A, part B and part C for assets
  
• As per point IV. (Plant and Machinery) of part C of schedule II, plant and machinery divided into two parts:
  

(i) General rate applicable to plant and machinery not covered under special plant and machinery

(a) Plant and Machinery other than continuous process plant not covered under specific industries: 15 years

(b) Continuous process plant for which no special rate has been prescribed under (ii) below [NESD]: 8 years

(ii) Special Plant and Machinery

1. Companies Act, 2013 specified useful life to compute depreciation under schedule II in part A, part B and part C for assets

2. As per point IV. (Plant and Machinery) of part C of schedule II, plant and machinery divided into two parts:

(i) General rate applicable to plant and machinery not covered under special plant and machinery

(a) Plant and Machinery other than continuous process plant not covered under specific industries: 15 years

(b) Continuous process plant for which no special rate has been prescribed under (ii) below [NESD]: 8 years

(ii) Special Plant and Machinery

Schedule II of Companies Act, 2013 specified different useful life for different types of assets as per its nature. Building has been divided into five categories, among which useful life specified for factory building is 30 years.