Disclosures regarding demonetized currencies not required for FY 2017-18 onwards

Disclosures regarding demonetized currency

Dear All,

After demonetization of Rs. 500 and Rs. 1,000 currency notes being Specified Bank Notes (SBNs), the Ministry of Corporate Affairs (MCA) introduced requirement for every company to disclose the details of SBNs held and transacted during the period from 8 November, 2016 to 30 December, 2016 as part of notes to account of financial statements for the year ended 30th March, 2017. Consequently, Schedule III to the Companies Act, 2013 was also amended.

Furthermore, the statutory auditors of every company were required to report, whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in SBNs during the period from 8 November, 2016 to 30 December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company. Such reporting was mandated by amending the Companies (Audit and Auditors) Rules, 2014.

Now, the Institute of Chartered Accountants of India (ICAI) has clarified that the above disclosures related with SBNs were event specific, and hence were applicable for only FY 2016-17. Therefore, there is no requirement of making such disclosures either in the notes to accounts by the companies nor in the auditor’s report by the auditors for FY 2017-18 and subsequent years. For this purpose, requisite disclosures regarding non-applicability may be given in the financial statements and auditor’s report.

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