Important Points for IC 89 - Management Accounting Exam
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Notes to accounts: A company shall disclose the following in the notes to accounts: Share capital, Reserves and surplus, Long term borrowings, Other long term liabilities, Long term provisions, Short term borrowings, Other current liabilities, Short term provisions, Tangible assets, Intangible assets, Non-current investments, Long term loans and advances, other non-current assets, Current investments, Investories, Trade receivables, Cash and other equivalents, Short term loans and advances, Other current assets and Contingencies and commitments.
Preparation of Financial Statements of Insurance company: The primary legislations including The insurance Act,1938 and the IRDA Act, 1999 that deal with insurance business in India provide the legal framework of insurance accounting in India over and above the principles and practice prescribed by Generally Accepted Accounting Principles and the various Accounting Standards issued by the Institute of Character Accountants of India and other international Financial Accounting Standards Board.
Section 11 of the Insurance Act, 1938 provides that every insurer, on or after the commencement of the IRDA Act, 1999 in respect of insurance business transacted by him and in respect of his shareholders fund, shall prepare at the expiration of each financial year: A Balance sheet, A Profit and Loss account, A separate Account of Receipts and Payments, Revenue Accounts in accordance with the regulations made by the Authority.
IRDA ( preparation of Financial statements and Auditors report of insurance companies) Regulations, 2002 provide that: An insurer carrying on life insurance business shall comply with the requirements of Schedule A to prepare financial statements, An insurer carrying on general insurance business shall comply with the requirements of schedule B to prepare financial statements, The Report of the Auditors on the Financial Statements of every insurer/re-insurer shall be in conformity with the requirements of Schedule C.
Life insurers shall prepare Financal statements as per specified Forms such as: Revenue Account, Profit and Loss Account and Balance Sheet as per Part V in Schedule A of Regulation.
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