Important clarification issued by MCA about reporting numbers in MCA filings for FY '22.
In a March 2022 notification, MCA had mandated that all financial numbers appearing in financial statements pertaining to FY ended 31st March, 2022 have to be rounded off appropriate to the total income of the company.
It always uncertain whether MCA will update the annual filing forms like AOC-4 (Submitting Balance Sheet), MGT-7 (Annual Return), DPT-3 (Details of Deposits) to match with the financials of the company. It would be prudent to do so considering that the financials would be in rounded off numbers.
MCA has now (26.09.2022) issued a clarification, that professionals will not be at fault/or incorrect if they certify e-forms, like AOC-4, where the company reports absolute numbers. Indirectly, saying that a company can file e-forms in absolute numbers.
Monik view: We see no prudency or logic in mandating MSME companies in rounding off their numbers. Companies anyway have to prepare and submit absolute numbers in their Income Tax Returns, GST Returns & also ROC filings now. Infact, these financials will be a pain in matters of assessments under various laws for MSMEs. MCA should go back to the optional rounding off, for small companies atleast but that is easier said that done.
Do you see any prudency in mandating companies to round off numbers in financials?
0%Yes, this was necessary
0%No, this will make things difficult
0%Has both pros & cons
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