Classify the following items under major heads and sub-heads (if any) in the Balance Sheet of the company as per Schedule-III, Part-I of the Companies Act, 2013 :
(i) Stores and Spare parts
(ii) Livestock
(iii) Public Deposits
Classify the following items under major heads and sub-heads (if any) in the Balance Sheet of the company as per Schedule-III, Part-I of the Companies Act, 2013 :
(i) Stores and Spare parts
(ii) Livestock
(iii) Public Deposits
Classification as per Schedule III, Part I, Companies Act, 2013:
| Item | Major Head | Sub-head |
|---|---|---|
| (i) Stores and Spare parts | Current Assets | Inventories |
| (ii) Livestock | Non-current Assets | Property, Plant and Equipment |
| (iii) Public Deposits | Non-current Liabilities | Long-term Borrowings |
Marking Scheme
- 11 mark each for correctly classifying Stores and Spare parts, Livestock, and Public Deposits with both major head and sub-head (0.5 mark major head + 0.5 mark sub-head, where applicable).
Hint
Ask: is it consumed/realised within 12 months (current) or held/repayable beyond 12 months (non-current)?
Quick Oral Answer
Stores and Spare parts go under Current Assets–Inventories since they're consumed short-term; Livestock is a Non-current Asset under Property, Plant and Equipment as it's a long-term operational asset; Public Deposits are Non-current Liabilities under Long-term Borrowings since they're repayable beyond a year.
Analysis & Explanation
Concept: Schedule III, Part I of the Companies Act, 2013 prescribes the format for a company's Balance Sheet, grouping every item under a Major Head (Equity and Liabilities / Assets) and, where applicable, a Sub-head.
- Stores and Spare parts are consumable items held for use in production/maintenance, so they are classified like raw material/consumables — under Current Assets → Inventories.
- Livestock (e.g. cattle used in a dairy/farm business) is a long-term tangible asset used in operations over multiple years, hence Non-current Assets → Property, Plant and Equipment.
- Public Deposits are amounts borrowed from the public generally repayable beyond one year, so they are shown as Non-current Liabilities → Long-term Borrowings.
Exam trap: Students often misclassify Livestock as a current asset (confusing it with inventory) or misclassify Public Deposits as a current liability without checking the repayment period; the deciding factor is always the TIME HORIZON — over or under 12 months from the balance sheet date.
Common Mistakes
- 1Classifying Livestock as Inventories/Current Assets instead of Property, Plant and Equipment under Non-current Assets.
- 2Classifying Public Deposits as a Current Liability without checking whether the deposit's maturity exceeds one year.
- 3Forgetting to mention the sub-head and stopping only at the major head, losing marks in a 'major head AND sub-head' question.
Interesting Facts
Schedule III was substantially revised in 2021 to require additional disclosures like ageing schedules for trade receivables/payables and shareholding of promoters.
Livestock is one of the few 'living' assets recognised as Property, Plant and Equipment under Indian accounting standards, similar to bearer plants in agriculture.
Public Deposits were historically a major private-sector fundraising route in India until RBI/Companies Act tightened deposit acceptance rules for companies after 2014.
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Frequently Asked Questions
Why is Livestock not treated as Inventory?
Livestock (e.g. cattle) is held for continued productive use over several years rather than for sale in the ordinary course of business, which is the defining feature of Property, Plant and Equipment rather than Inventories.
When would Public Deposits be classified as a Current Liability instead?
If the deposit is repayable within 12 months from the balance sheet date, it would be shown under Current Liabilities — Other Current Liabilities, instead of Non-current Liabilities.