Presentation of Trade Payables in Financial Statements

Schedule III of The Companies Act, 2013 requires the presentation of ‘Trade Payables’ as a separate line item on the face of the Balance Sheet under

• ‘Financial Liabilities’ in case of companies preparing Financial Statements as per Companies (Indian Accounting Standards) Rules, 2015.
• ’Current Liabilities’ in case of Companies preparing Financial Statements as per Companies (Accounting Standards) Rules, 2006. which should be further categorized into total outstanding dues to micro-enterprises and small enterprises and to creditors other than small enterprises and micro-enterprises.

Ageing of trade payables due for payment: –

This disclosure requires the company to provide ageing of trade payables due for payment as on the balance sheet date in the prescribed format. Also, a separate disclosure shall be provided for the amounts of unbilled payables and trade payables that are not due. Unbilled trade payables shall also include accruals that are not classified as provisions under Ind AS 37 & AS 29 Provisions, Contingent Liabilities and Contingent Assets.

The ageing requirement is not applicable to the trade payables that are not due for payment.

In respect of trade payables due for payment, the following ageing schedule should be given:

# Similar information shall be given where no due date of payment is specified in that case disclosure shall be from the date of the transaction.

The amounts to be presented under (i) MSME and (ii) Others shall include those trade payable dues that are undisputed.

Further, Section 22 of Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 requires the following disclosures in the Financial Statements:

• The principal amount and the interest due thereon, remaining unpaid to any supplier till the appointed date.
• The amount of interest paid by the buyer on account of delayed payments.
• The principal amount and interest due beyond the appointed date for the period of delay.
• The amount of interest accrued and remaining unpaid at the end of each accounting year.
• The amount of further interest remaining due and payable even in the succeeding year, until such date when the interest due is actually paid to the MSMEs.

The above disclosure shall be applicable to all the companies preparing Financial Statements for the financial year 2021-22 onwards.

Varsha Laur, Audit Associate, SW India