MCA issued Clarification on mandating Companies to round off Figures appearing in Financial Statements

The Ministry of Corporate Affairs(MCA) has issued a clarification on mandating companies to round off figures appearing in Financial Statements.

MCA Stated in Clarification, “Amendment to Schedule III to the Companies Act, 2013 vide MCA Notification GSR. 207(E) dated 24th March 2021 mandates companies to round off the figures appearing in the Financial Statements depending upon their total income. However, if the companies provide absolute figures in e-forms i.e. AOC-4, the same shall not be treated as incorrect certification by the Professionals.”

Form AOC-4 is for filing the company’s financial statement for every financial year with the Registrar of Companies. The company is responsible for duly furnishing the form within 30 days of its Annual General Meeting. In the case of consolidated financial statements, the company shall file the AOC-4 CFS.

Financial statements are the records of a company’s financial condition and activities during a period of time. Financial statements reflect a company’s financial condition and success. The income statement, balance sheet, and cash flow statement are the three primary financial statements. The three statement financial model is built by connecting these three statements. An analyst can evaluate a company’s profitability and liquidity by looking at its financial statements. Financial reports are intricate.