Skip to content

IAI Actuarial Core Principles · Business Finance · Regulation of financial reporting of incorporated entities

Which statement about the financial year of a company under the Companies Act 2013 is correct?

Under the Companies Act 2013 the financial year ends on 31 March. A different year-end is permitted only in specified cases, for example where the company is a holding or subsidiary of a foreign company, and requires approval from the Tribunal.

  1. AEvery company may choose any twelve-month period regardless of tax rules
  2. BThe financial year of all companies must end on 31 December
  3. CThe financial year ends on 31 March, with a different date allowed only for specified cases such as a holding company of a foreign entity, with Tribunal approvalCorrect
  4. DCompanies may change their financial year freely each year without approval
  5. The financial year must end on 30 June for listed companies

Explanation

The Act requires the financial year to end on 31 March each year. A company that is a holding or subsidiary of a company incorporated outside India and needs a different year for consolidation may apply to the Tribunal for a different date. Free choice is therefore incorrect.

Did you get it right without looking?

One question tells you little. A timed set on Regulation of financial reporting of incorporated entities shows your real accuracy, how long you take and where you lose marks.

Practise Regulation of financial reporting of incorporated entitiesFree diagnostic mock

More Regulation of financial reporting of incorporated entities questions