Advanced Accounting · Financial Statements of Companies

Fixed Assets, Investments and Current Assets Presentation under Schedule III

Updated 5 October 2026 · Fact-checked

Schedule III of the Companies Act, 2013 requires the asset side of a company balance sheet to split into non-current and current assets. You classify each item using the operating cycle and the 12-month test, then show required sub-heads, such as fixed assets, investments, inventories, receivables and cash, with the prescribed disclosures.

Understand Fixed Assets, Investments and Current Assets Presentation

This page follows Schedule III Division I, which applies to companies that follow the Accounting Standards (AS) and not Ind AS. Division II is for companies that follow Ind AS. It uses different heads, for example Property, Plant and Equipment, Investment property, Goodwill, Other intangible assets, Biological assets other than bearer plants, Financial assets and Bank balances other than cash and cash equivalents, and it applies Ind AS 16 (PPE), Ind AS 38 (intangible assets), Ind AS 109 (financial instruments, including investments) and Ind AS 2 (inventories). Do not mix the two sets of heads and standards in one answer.

Schedule III gives the format of a company balance sheet. The asset side has two main heads: non-current assets and current assets. Your first job is always classification. Everything else follows from it.

An asset is current if it meets any one of these: it is expected to be realised, or is intended for sale or consumption, in the company's normal operating cycle; it is held mainly for trading; it is expected to be realised within 12 months after the reporting date; or it is cash or a cash equivalent (unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date). All other assets are non-current. The operating cycle is the time between buying materials and realising cash from the sale. If it cannot be identified, assume 12 months.

Under Division I, non-current assets are shown under these sub-heads: Fixed assets, which are split into Tangible assets (with classes such as land, buildings, plant and equipment, furniture and fixtures, vehicles), Intangible assets (such as goodwill, brands, computer software, licences), Capital work-in-progress and Intangible assets under development; then Non-current investments, Deferred tax assets (net), Long-term loans and advances and Other non-current assets. Long-term trade receivables (including those on deferred credit terms) are non-current. Show them in the non-current section as the Division I note requires, with the secured good, unsecured good and doubtful classification and the allowance for doubtful debts. Keep them apart from current trade receivables. Schedule III requires a reconciliation of gross and net carrying amount for each class: opening balance, additions, disposals, depreciation or amortisation and impairment, and closing balance.

Current assets are shown as: Current investments, Inventories, Trade receivables, Cash and cash equivalents (which includes balances with banks), Short-term loans and advances and Other current assets. Investments are split by nature, such as equity instruments, preference shares, government securities, debentures and mutual funds, and by whether they are quoted or unquoted. Inventories are shown by type: raw materials, work-in-progress, finished goods, stock-in-trade, stores and spares, loose tools. The mode of valuation must be stated.

Trade receivables, both long-term and short-term, are shown as secured good, unsecured good, and doubtful, less allowance for bad and doubtful debts. Schedule III also requires an ageing schedule from the due date of payment (or the transaction date if no due date), in buckets such as less than 6 months, 6 months to 1 year, 1-2 years, 2-3 years and more than 3 years. Under Division I, it is disclosed separately for undisputed and disputed receivables, and each of these two groups is further split into considered good and considered doubtful. The categories 'significant increase in credit risk' and 'credit impaired' belong to Division II (Ind AS), so do not use them in a Division I answer.

The Division I note on Cash and cash equivalents shows balances with banks (with earmarked balances and margin money disclosed separately), cheques and drafts on hand, cash on hand, and others. Under AS 3, a cash equivalent is a short-term highly liquid investment with an original maturity of 3 months or less. Bank deposits with original maturity of more than 3 months and balances held as margin money are not AS 3 cash equivalents, so the cash flow statement figure excludes them.

This creates a presentation versus AS 3 difference, and it is not a settled rule. In the balance sheet, show such deposits as the question requires. If the question asks you to follow the Division I note, they sit within Balances with banks, with margin money and deposits with more than 12 months maturity disclosed separately. In that case the note total is higher than the AS 3 figure used in the cash flow statement. State your assumption and give both figures. 'Bank balances other than cash and cash equivalents' is a Division II (Ind AS) head, so do not use it in a Division I answer.

Key rules to remember

Current asset test: Current if: operating cycle OR held for trading OR realisable within 12 months OR cash/cash equivalent (unrestricted); Meeting any one condition makes it current. Otherwise it is non-current.
Net carrying amount of fixed assets: Net block = Gross block − Accumulated depreciation − Impairment; Schedule III wants the opening-to-closing reconciliation for each class, not only the closing figure.
Investments classification: Current investment = readily realisable by its nature and intended to be held for not more than one year from the date of investment; all others = non-current investment; This page follows Schedule III Division I (companies following AS). The definitions and the measurement basis come from AS 13: current investments at lower of cost and fair value, long-term investments at cost less diminution other than temporary. Schedule III governs only how they are presented, that is, by nature and as quoted or unquoted. Under Division II (Ind AS), investments are financial assets and follow Ind AS 109.
Inventories valuation: Inventory = Lower of cost and net realisable value; Follows AS 2 under Division I (Ind AS 2 under Division II). Disclose the mode of valuation and the sub-classification.
Net trade receivables: Net = Secured good + Unsecured good + Doubtful − Allowance for doubtful debts; Allowance is shown as a deduction. The secured good, unsecured good and doubtful classification applies to both long-term and short-term trade receivables. Long-term trade receivables (including those on deferred credit terms) are non-current. Show them in the non-current section as the Division I note requires, separately from current trade receivables. If the question has no secured receivables, that component is nil. Provision for discount on debtors is not part of this.
Cash and cash equivalents: AS 3 cash equivalents = Cash + Bank balances + Cheques/drafts in hand + Short-term highly liquid investments (original maturity up to 3 months); Deposits with original maturity over 3 months and margin money are not AS 3 cash equivalents, so the cash flow statement figure excludes them. The Division I note on Cash and cash equivalents includes balances with banks, with margin money and earmarked balances disclosed separately. How you show deposits over 3 months in the balance sheet depends on the question's requirement. This is a presentation versus AS 3 point, so state your assumption. 'Bank balances other than cash and cash equivalents' is a Division II head.

How to solve Fixed Assets, Investments and Current Assets Presentation questions

Use this order for any presentation question, whether it asks for a full balance sheet extract or a single note.

1Read the list of balances and mark each as asset, then decide non-current or current using the operating cycle and 12-month test.
2For tangible and intangible fixed assets, compute net carrying amount: cost plus additions less disposals less accumulated depreciation or amortisation. Keep land, buildings and each class separate.
3Sort investments into current and non-current using intention and holding period. Then split by type and quoted or unquoted.
4Value inventory at lower of cost and NRV item by item, then show raw materials, WIP and finished goods separately.
5Show trade receivables net of allowance, split into secured good, unsecured good and doubtful. Show long-term trade receivables as non-current, separately from current trade receivables. Prepare the ageing buckets if dates are given.
6Build cash and cash equivalents. Treat only unrestricted cash, bank balances, cheques in hand and deposits of up to 3 months original maturity as AS 3 cash equivalents for the cash flow statement. For the balance sheet note, show other deposits and margin money as the question requires, with margin money and deposits of more than 12 months maturity disclosed separately. State your assumption, because this is a presentation versus AS 3 difference.
7Total each head, write note numbers against the balance sheet line, and check that totals agree with the question data.

Quickest way: Tick-and-bucket method for MCQs and written notes

When to use it: Use it when time is short, for example for 1-2 mark MCQs on classification or a 5-mark note presentation.

For MCQs, ask one question first: will this turn into cash or be used up within the operating cycle or 12 months? If yes, current; if no, non-current.
Eliminate options that treat long-term deposits or margin money as AS 3 cash equivalents, or that put capital advances in current assets.
For a written answer, draw the sub-head list down the page first, then drop each amount into the right sub-head. Marks are given for correct placement.
Write the working line for each figure, for example Gross block − Depreciation = Net block. Step marks are given even if one number is wrong.
End with a total and a one-line check against the balance sheet total.

Common mistakes in Fixed Assets, Investments and Current Assets Presentation

Treating a deposit with the bank as cash equivalent regardless of maturity.
Students see the word 'bank' and assume it is cash.
Fix: Include only deposits with original maturity of up to 3 months in cash equivalents. Show other bank deposits separately, and mark those with more than 12 months' maturity as such.
Showing capital advances under current assets.
Students treat every advance as a short-term advance.
Fix: Capital advances are given for acquiring non-current assets, so show them under long-term loans and advances.
Deducting the allowance for doubtful debts from the wrong figure or leaving it out.
Students mix up bad debts written off with the provision.
Fix: Write off actual bad debts first, then compute the allowance on the remaining debtors, then show net receivables with the allowance deducted.
Mixing up current and non-current investments.
Students look only at whether the investment is quoted or whether it is in shares.
Fix: Use intention and the holding period. Investments readily realisable and intended to be held for not more than one year from the date of investment are current. Classify everything else as non-current.
Valuing inventory as a lump sum at cost.
Students forget that lower of cost and NRV is applied item by item (or group by group), not on the total.
Fix: Compare cost and NRV for each item, take the lower, then add up the values.
Presenting fixed assets only at closing net value with no reconciliation.
Students skip the movement table to save time.
Fix: Show opening gross block, additions, disposals, closing gross block, depreciation and net block for each class. Even a short table earns marks.

Worked examples

Example 1

From the following balances of Rudra Ltd. as on 31st March 2027, show Cash and cash equivalents and Trade receivables as they would appear in the notes to the balance sheet.

Cash on hand ₹40,000; Balance with bank in current account ₹2,60,000; Cheques in hand ₹30,000; Fixed deposit with bank for 2 months (original maturity) ₹1,00,000; Fixed deposit with bank for 3 years (original maturity, remaining maturity more than 12 months) ₹5,00,000; Margin money against bank guarantee ₹70,000 (restricted for 6 months from the reporting date); Trade receivables (unsecured, considered good) ₹12,00,000; Trade receivables considered doubtful ₹1,50,000; Allowance for doubtful debts ₹1,50,000.

Show the solution

AS 3 cash equivalents: cash on hand ₹40,000 + current account ₹2,60,000 + cheques in hand ₹30,000 + FD of 2 months ₹1,00,000.
Total = 40,000 + 2,60,000 + 30,000 + 1,00,000 = ₹4,30,000. This is the figure for the cash flow statement.
The 3-year FD of ₹5,00,000 is not an AS 3 cash equivalent, because its original maturity is more than 3 months.
Margin money of ₹70,000 is restricted, so it is not an AS 3 cash equivalent either.
Presentation point: the Division I note on Cash and cash equivalents includes balances with banks, with margin money disclosed separately. Assume the question asks for this presentation. Balances with banks = current account 2,60,000 + FD of 2 months 1,00,000 + FD of 3 years 5,00,000 + margin money 70,000 = ₹9,30,000. Add cheques in hand ₹30,000 and cash on hand ₹40,000. Total of the note = ₹10,00,000. Disclose the ₹5,00,000 deposit as one with more than 12 months maturity and the ₹70,000 as margin money against a bank guarantee.
The ₹10,00,000 differs from the ₹4,30,000 AS 3 figure by ₹5,70,000 (₹5,00,000 + ₹70,000). State this difference and your assumption in the answer. Do not use 'Bank balances other than cash and cash equivalents', which is a Division II head.
Trade receivables (taken as due within the operating cycle, so current): secured good nil; unsecured good ₹12,00,000 + doubtful ₹1,50,000 = ₹13,50,000. Long-term or deferred-credit receivables, if any, would be shown as non-current, separately from these current receivables.
Less allowance for doubtful debts ₹1,50,000. Net trade receivables = ₹12,00,000.

Answer: Cash and cash equivalents note (Division I presentation, on the stated assumption) = ₹10,00,000, made up of balances with banks ₹9,30,000 (including the 3-year FD of ₹5,00,000, disclosed separately as over 12 months, and margin money of ₹70,000, disclosed separately), cheques in hand ₹30,000 and cash on hand ₹40,000. The AS 3 cash and cash equivalents figure for the cash flow statement is only ₹4,30,000. Net trade receivables = ₹12,00,000 (₹13,50,000 gross less ₹1,50,000 allowance).

Exam tips

MCQs on this topic are mostly classification. Practise the 12-month test and operating cycle until you can answer in 20 seconds.
In a written answer, give the sub-head name exactly as in Schedule III. Examiners give marks for correct headings and correct placement.
Always show the working for net block, net receivables and cash equivalents on the page, not just the final number.
If dates of receivables are given, prepare the ageing table. Even a partial table earns marks.
Know which standard covers which item under Schedule III Division I: AS 10 (Revised) for tangible fixed assets, AS 26 for intangible assets, AS 13 for investments and AS 2 for inventories. The standards give recognition and measurement rules. Schedule III only prescribes how the items are presented and disclosed. In Division I, use the head Fixed assets with Tangible assets and Intangible assets. Division II (Ind AS) uses Ind AS 16 (PPE), 38, 109 and 2 and different heads such as Property, Plant and Equipment and Financial assets.

Practice questions from Financial Statements of Companies

Fixed Assets, Investments and Current Assets Presentation: frequently asked questions

How do I decide between current and non-current investments in the balance sheet?

Look at intention and holding period. An investment that is readily realisable and intended to be held for not more than one year from the date of investment is current. Every other investment is non-current. Do not decide on the basis of whether it is quoted.

What is the trade receivables ageing schedule under Schedule III?

It is a table showing outstanding trade receivables by period from the due date of payment, or the transaction date if there is no due date. The buckets are less than 6 months, 6 months to 1 year, 1-2 years, 2-3 years and more than 3 years. Under Division I it is shown separately for undisputed and disputed receivables, each split into considered good and considered doubtful. The heads 'significant increase in credit risk' and 'credit impaired' are used only under Division II (Ind AS).

What goes into cash and cash equivalents?

For AS 3 and the cash flow statement: cash on hand, balances with banks, cheques and drafts on hand, and short-term highly liquid investments with an original maturity of up to 3 months. Bank deposits of longer original maturity and restricted balances such as margin money are not AS 3 cash equivalents. The Division I balance sheet note includes balances with banks, with margin money and deposits of more than 12 months maturity disclosed separately. This is a presentation versus AS 3 difference, so follow the question's requirement and state your assumption. 'Bank balances other than cash and cash equivalents' is a Division II head.

Do I need to show the fixed assets reconciliation in the exam?

Yes, when the question gives opening balances, additions, disposals and depreciation. Show gross block, accumulated depreciation and net block for each class. The movement table is the main way to earn step marks.