Attention: New Financial Statement Formats for Non-Corporate Entities now applicable

Starting April 1, 2025, the ICAI’s released Guidance Note on Financial Statements for Non-Corporate Entities is officially in force.

If you sign any financial documents starting today, they must comply with the Guidance Note. Traditional financial statements are no longer acceptable. Non-compliance is not an option.

Immediate Action Required by CAs

• Follow the prescribed format strictly.
• Present comparative figures for the previous year.
• Align accounting policies with the new guidance.
• Provide detailed Notes to Accounts.
• Classify assets and liabilities into current and non-current.
• Disclose the basis of preparation and key judgements/estimates.

CAs to Strictly Avoid These Things

• Preparing T-format or any old format financials that you would have been preparing historically.
• Reporting for current year only (comparatives are mandatory).
• Using outdated or generic accounting policy templates.
• Skipping or summarizing required disclosures.
• Informal or tax-oriented presentation styles.
• Mixing tax and accounting figures without proper reconciliation.

Important Mandatory Changes to be Followed

• Uniform format for Balance Sheet and Statement of Profit and Loss for all Non Corporate Entities.
• Clear, mandatory disclosure of significant accounting policies.
• Application of Accounting Standards for Non-Corporate Entities.
• Proper asset/liability classification.
• Detailed disclosures for related party transactions (AS 18).
• Disclosure of contingent liabilities (AS 29).

Consequences of Failing to Comply with Changes

• Rejection by tax authorities, banks, and other institutions.
• ICAI will proceed with the Disciplinary action against the accused.
• Professional credibility will get affected or even damaged.
• Loss of client trust and questions on your competence.

To Read Guidance Note – Click Here