MSE Disclosure Checklist

download MSE Disclosure Checklist

of 29

Transcript of MSE Disclosure Checklist

  • 8/7/2019 MSE Disclosure Checklist

    1/29

    The Institute of

    Chartered Accountants

    of Pakistan

    FINANCIAL STATEMENTSDISCLOSURE CHECK LIST

    FORMEDIUM-SIZED ENTITIES (MSEs)

  • 8/7/2019 MSE Disclosure Checklist

    2/29

    FINANCIAL STATEMENTS DISCLOSURE CHECKLIST FOR MSEs

    NAME OF THE ENTITY _____________________________

    FINANCIAL STATEMENTS

    FOR THE YEAR ______________________________________

    NAME OF THE AUDITOR ______________________________

    Introduction and Explanatory Comments 1

    PART I General

    1.0 General Disclosure Information 2

    2.0 Fundamental Accounting Assumptions 4

    3.0 Significant Accounting Policies 5

    PART II Balance Sheet

    1.0 Information to be Presented on the face of the Balance sheet 8

    2.0 Share Capital 93.0 Reserves 9

    4.0 Surplus on Revaluation of Fixed Assets 10

    5.0 Non-current Liabilities 10

    6.0 Current Liabilities 13

    7.0 Contingencies 14

    8.0 Commitments 15

    9.0 Events after the Balance Sheet Date 15

    10.0 Fixed Assets (Other than Investments) 15

    11.0 Long-Term Investments 17

    12.0 Long-Term Loans and Advances 19

    13.0 Long-Term Deposits and Prepayments 20

    14.0 Current Assets 20

    15.0 Inventories 20

    PART III Income Statement 22

    PART IV Cash Flow Statement 26

    PART V Statement of Changes in Equity 27

    INDEX Page No.

  • 8/7/2019 MSE Disclosure Checklist

    3/29

    INTRODUCTION AND EXPLANATORY COMMENTS

    1

    2

    3

    4

    5

    6

    7

    8

    This checklist seeks to provide guidance to the reporting companies and their auditors with

    regard to the disclosures to be made in the financial statements prepared in accordance with

    the Accounting and Financial Reporting Standards for Medium-Sized Entities (MSEs) as

    defined in Institutes circular No. 06/2007 dated November 02, 2007 and the requirements ofthe Companies Ordinance, 1984.

    The checklist is merely a technical practice aid and in no way represents the authoritative

    pronouncements of the Institute. It does not aim to interpret the statutory disclosure

    requirements set out in the Fifth Schedule and MSE Standards of ICAP.

    This checklist seeks to represent minimum requirements and does not purport to be all

    inclusive and would need review in the light of changes in statutory requirements and

    accounting standards from time to time. Users may need to expand or modify the checklist

    when further accounting standards are issued or made applicable subsequently.

    Users of this Checklist are advised to refer directly to applicable statutory provisions and

    MSE Standards when appropriate.

    Use of the Checklist requires the exercise of individual professional judgment and may

    require some modification based on the circumstances of individual reporting companies.

    Respond to each item of the Checklist with a tick ()in the appropriate column : Yes

    indicating disclosures; No: indicating disclosures not made and N/A showing items not

    present or relevant.

    Items marked No should be accompanied by an explanatory memorandum to document in

    what manner and to what extent disclosure falls short of the statutory requirement, and MSEStandards . The explanation should include either the amount or an appropriate percentage

    relationship.

    Each disclosure requirement listed in the Checklist, wherever applicable, is denoted by

    relevant clause or reference of the Fifth Schedule (Part I, II, or III).

    The Institute of Chartered Accountants of Pakistan 1

  • 8/7/2019 MSE Disclosure Checklist

    4/29

    FINANCIAL STATEMENTS DISCLOSURE CHECKLIST FOR MSEs

    Para #

    YES NO N/A

    PART 1 - GENERAL

    1.0 GENERAL DISCLOSURE / INFORMATION

    1.1

    Medium-Sized Entity means an Entity that:

    a. is not a listed company or a subsidiary of a listed company;

    b.

    c.

    d.

    e.

    f.

    1.2 Is each component of the financial statements clearly identified? MSE 1.12

    a.

    b.

    c.

    1.3 MSE 1.36

    a.

    b.

    c.

    1.4 Do the financial statements include: MSE 1.1

    a. balance sheet;

    b. an income statement;

    c. a statement showing either:

    i) all changes in equity; or

    ii) changes in equity other than those arising from capital transactions

    with equity holders acting in their capacity as equity holders

    d. cash flow statement; and

    e. accounting policies and explanatory notes.

    1.5 Has the statement of compliance given in the notes to the financial statements complied with the

    statement given in ICAP Circular 06/2007 dated: November 2, 2007?

    1.6 MSE 1.3

    1.7 Has management (in the extremely rare circumstances) concluded that compliance MSE 1.5

    with a requirement in approved accounting standards is so misleading that it would conflict

    with the objective of financial statements set out in the Framework?

    DISCLOSURE MADE

    Has the Entity complied with the following conditions in order to qualify as a Medium-Sized Entity as

    defined in ICAP's MSE Standard and Fifth Schedule:

    has not f iled, or is not in the process of f il ing, its f inancial statements with the Securit ies and

    Exchange Commission of Pakistan (SECP) or other regulatory organization for the purpose of

    issuing any class of instruments in a public market;

    does not hold assets in a f iduciary capacity for a broad group of outsiders, such as a bank,

    insurance company, securities broker/dealer, pension fund, mutual fund or investment banking

    entity;

    is not a public utility or similar company that provides an essential public service;

    is not economically significant on the basis of criteria defined in Fifth Schedule; and

    is not a Small-Sized Entity on the basis of criteria defined in Fifth Schedule.

    Has the following information been prominently displayed and repeated when it is necessary for a proper

    understanding of the information presented:

    the name of the reporting entity or other means of identification;

    the balance sheet date or the period covered by the other financial statements, whichever is

    appropriate to the related component of the financial statements; and

    the reporting currency.

    Has the Entity disclosed the following, if the information is not disclosed elsewhere in the information

    published with the financial statements:

    the domic ile and legal form of the ent ity , i ts place of incorporation and the address of the

    registered office (or principal place of business, if different from the registered office);

    a description of the nature of the entity's operations and its principal activities; and

    the name of the parent and the ultimate parent of the group.

    Has the Entity whose financial statements are drawn up in compliance with the standard and the

    Companies Ordinance, 1984, specified in its accounting policy note that these financial statements are i

    compliance with Accounting and Financial Reporting Framework for MSEs and the Companies

    Ordinance, 1984?

    The Institute of Chartered Accountants of Pakistan 2

  • 8/7/2019 MSE Disclosure Checklist

    5/29

  • 8/7/2019 MSE Disclosure Checklist

    6/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    e. the amount of any cumulative preference dividends not recognised.

    1.14 MSE 1.2

    1.15 MSE 1.2

    MSE 1.2

    1.16 Have the notes to the financial statements been presented in a systematic manner? MSE 1.32

    1.17 Has it been ensured that each item on the face of the balance sheet, income statement

    and cash flow statement been cross-referenced to any related information in the notes? MSE 1.32

    1.18 Has the Entity:

    a. MSE 1.11

    b.

    1.19 MSE 1.11

    a. the nature of the reclassification;

    b. the amount of each item or class of items that is reclassified; and

    c. the reason for the reclassification.

    1.20 When it is impracticable to reclassify comparative amounts, has the Entity disclosed the MSE 1.11

    reason for not reclassifying the amount and the nature of the adjustment?

    2.0 FUNDAMENTAL ACCOUNTING ASSUMPTIONS

    2.1 Going concern

    a. Are the f inancial statements prepared on a going concern basis after the management MSE 1.6

    has made an assessment of the Entity's ability to continue as a going concern?

    If answer to (a) above is NO, give the answer to the following questions (b) to (d):

    b. Does the management intend to liquidate the Entity or to cease trading

    or has no realistic alternative but to do so?

    c. When the management is aware, in making its assessment of the Entity's ability to

    continue as a going concern, of material uncertainties related to events

    or conditions which may cast significant doubt upon the Entity's

    ability to continue as a going concern, have those uncertainties been disclosed?

    d. when the financial statements are not prepared on a going concern

    basis, has the following information been disclosed:-

    i) the fact that the financial statements have not been prepared on a going concern basis;

    ii) the basis on which the financial statements have been prepared;

    iii) the reason why the Entity has not been considered to be a going concern.

    Accrual Basis of Accounting

    2.2 Has the Entity disclosed the fact that its financial statements, except for cashflow information,

    been prepared under the accrual basis of accounting? MSE 1.7

    Consistency of Presentation

    Do the financial statements present fairly the financial position, financial performance and cash flows of

    the Entity?

    Has the appropriate application of the standard, with additional disclosure, resulted (in virtually allcircumstances) in the financial statements achieving a fair presentation as appropriate for MSEs?

    In the event that a transaction undertaken by the Entity, is not covered by the standard, the Entity should

    look to the full set of International Accounting Standards (IAS) and International Financial Reporting

    Standards (IFRS) for authoritative guidance, as set out in paragraph 12.1of MSE Standard

    disclosed comparative information in respect of the previous period for all numerical information

    in the financial statements, unless a Standard permits or requires otherwise.

    included comparative information for narrative and descriptive information when it is relevant to

    an understanding of the current periods financial statements?

    When the presentation or classification of items in the financial statements is amended and comparative

    amounts are reclassified (unless the reclassification is impracticable), has the entity disclosed the

    following information:

    The Institute of Chartered Accountants of Pakistan 4

  • 8/7/2019 MSE Disclosure Checklist

    7/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    2.3 Has the Entity retained consistency in the financial statements from one period to the next: MSE 1.8

    a. the presentation of items; and

    b. the classification of items.

    2.4 Has the presentation and classification of items in the financial statements MSE 1.8

    been retained from last period to the present one: If NO, is it due to:

    a. a significant change in the nature of the operations of the Entity or a

    review of its financial statement presentation demonstrates that the

    change will result in a more appropriate presentation of events or

    transactions; or

    b. a change in presentation is required by an approved Accounting Standard

    Materiality and Aggregation

    2.5 Has each material class of similar items been presented separately in the financial statements? MSE 1.9

    3.0 SIGNIFICANT ACCOUNTING POLICIES

    3.1 Has the account ing pol icy sect ion of the notes to the f inancial s tatements disclosed a Suggest ive

    description of all significant accounting policies of the reporting entity presented in

    a clear and concise manner at one place?

    3.2

    a.

    b. MSE 1.33

    3.3 MSE 1.34

    a.

    b.

    3.4 The accounting policies that a Entity might consider presenting include, but are not

    restricted to, the following (other standards specifically require disclosure of accounting

    policies in many of these areas):

    a. revenue recognition; MSE 9.11a

    b. consolidation principles, including subsidiaries and associates; Suggestive

    guidance(from b - p)

    c. property, plant & equipment;

    d. Intangible assets;

    e. financial instruments and investments;

    f. leases;

    g. inventor ies;

    h. taxes, including deferred taxes;

    i. p rovisions;

    j. employee benefit costs;

    k. foreign currency translation and hedging;

    l. definition of cash and cash equivalents;

    m. method used for investment in associates;

    Has the entity disclosed the following in the accounting policies section of the notes to the financial

    statements :

    the measurement basis (or bases) used in preparing the financial statements and;

    each specific accounting policy used that is necessary for a proper understanding of the financia

    statements.

    Has the Entity disclosed in the notes, information about the key assumptions concerning the future, and

    other key sources of estimation uncertainty at the balance sheet date having a significant risk of causing

    a material adjustment to the carrying amounts of assets and liabilities within the next financial year? In

    respect of those assets and liabilities have the notes included details of:

    their nature; and

    their carrying amount as at the balance sheet date.

    The Institute of Chartered Accountants of Pakistan 5

  • 8/7/2019 MSE Disclosure Checklist

    8/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    n. valuation of inventories;

    o. borrowing costs;

    p. Govt. grants

    3.5 Change in Accounting Policies

    3.5.1 Has the Entity changed its accounting policy? Yes or No?

    3.5.2 If Yes is the change in accounting policy: MSE 12.3

    a. required by a Standard ; or

    b. it results in the financial statements providing reliable and more relevant

    information about the effects of transactions or other events

    on the Entitys financial position, financial performance or cash flows.

    3.5.3 MSE 12.2

    3.5.4 MSE 12.6

    a. the fact that the change in accounting policy is made in accordance with the change in

    the Standard, with a description of those provisions;

    b. the amount of the adjustment for the current period and for each prior period

    presented;

    c. the amount of the adjustment relating to periods prior to those included in the

    comparative information; and

    d. the fact that comparative information has been restated, or that restatement for a

    particular prior period has not been made because it would require undue cost and

    effort.

    3.5.5 Has the change in accounting policy been applied retrospectively? MSE 12.7

    3.5.6

    3.5.7 MSE 12.8

    3.5.8 MSE 12.9

    a. the reasons for the change;

    b. the amount of the adjustment for the current period and for each prior period

    presented;

    c. the amount of the adjustment relating to periods prior to those presented; and

    d. that comparative information has been restated, or that restatement for a particular

    prior period has not been made because it would require undue cost or effort?

    3.6 Errors

    3.6.1 MSE 12.13

    a. by restating the comparative amounts for the prior period(s) in which the

    Has the Entity selected and applied its accounting policies for a period consistently for similar

    transactions, other events and circumstances? If this section requires or permits such

    categorisation, has the appropriate accounting policy been selected and applied consistently to

    each category?

    Where application of a change in the Standard has a material effect on the current period or any

    prior period presented, has the Entity disclosed the following:

    Have the opening balance of retained earnings for the earliest prior period presented and the

    other comparative amounts disclosed for each prior period presented been adjusted, where

    applicable, as if the new accounting policy was always in use?

    When comparative information for a particular prior period is not restated, has the new

    accounting policy been applied to the balances of assets and liabilities at the beginning of the

    next period, and a corresponding adjustment made to the opening balance of retained earnings

    for the next period?

    When a change in an accounting policy has an effect on the current period or any prior period

    presented, or may have an affect in subsequent periods, has the Entity disclosed the following:

    Has the Entity corrected material prior period errors retrospectively in the first set of financial

    statements authorised for issue after their discovery:

    The Institute of Chartered Accountants of Pakistan 6

  • 8/7/2019 MSE Disclosure Checklist

    9/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    error occurred; or

    b. if the error occurred before the earliest prior period presented, by

    restating the opening balances of assets, liabilities and equity for that

    period?

    3.6.2 MSE 12.14

    3.6.3 Has the Entity disclosed the following:

    a. the nature of the prior period error;

    b. the amount of the correction for each prior period presented? MSE 12.15

    3.7 Changes in Accounting Estimates

    3.7.1 MSE 12.10

    a. the period of the change, if the change affects that period only; or

    b. the period of the change and future periods, if the change affects both.

    3.7.2 To the extent that a change in an accounting estimate gives rise to changes in

    assets and liabilities, or an item of equity, has it been recognised by adjusting

    the carrying amount of the related asset, liability or equity item in the period of

    the change? MSE 12.11

    3.7.3 Has the following information been disclosed for a change in accounting estimates

    that has an effect in the current period or expected to have an effect in future periods:

    a. the nature of the change; and

    b. the amount of the change unless considered impract ical to quantify the amount MSE 12.12

    Has the prior period error been corrected by retrospective restatement except to the extent that i

    is impracticable to determine either the period-specific effects or the cumulative effect of the

    error?

    Has the effect of a change in an accounting estimate been recognised prospectively by including

    it in profit or loss in:

    The Institute of Chartered Accountants of Pakistan 7

  • 8/7/2019 MSE Disclosure Checklist

    10/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    PART II - BALANCE SHEET

    1.0 INFORMATION TO BE PRESENTED ON THE FACE OF THE BALANCE SHEET

    1.1 As a minimum, has the face of the balance sheet included l ine i tems which present the MSE 1.19

    following amounts:

    a. property, plant and equipment;

    b. intangible assets;

    c. investments;

    d. inventories;

    e. trade and other receivables;

    f . cash and cash equivalents;

    g. trade and other payables;

    h. tax liabilities and assets;

    i. provisions;

    j. non-current interest-bearing liabilities; and

    k. capital and reserves.

    1.2 If the Entity not separately present current and non-current assets, and current and non-current MSE 1.14

    liabilities on the face of its balance sheet, has it present all assets and liabilities broadly in

    order of liquidity?

    1.3 If the Entity present separately current and non-current assets, and current

    and non-current liabilities on the face of its balance sheet, has the Entity classified:

    a. an asset as current when it: MSE 1.16

    is expected to be realised in, or is intended for sale or consumption in,

    the Entitys normal operating cycle;

    is held primarily for the purpose of being traded;

    is expected to be realised within twelve months of the balance sheet

    date; or

    is cash or a cash equivalent asset unless it is restricted from being

    exchanged or used to settle a liability for at least twelve months after

    the balance sheet date.

    Are all other assets classified as non-current, including intangible assets? MSE 1.16

    Has the Entity classified:

    b. a liability as current when it: MSE 1.17

    is expected to be settled in the Entitys normal operating cycle;

    is held primarily for the purpose of being traded;

    is due to be settled within twelve months after the balance sheet date; or

    is not attached to an unconditional right to defer settlement of the

    liability for at least twelve months after the balance sheet date.

    Are all other liabilities classified as non-current? MSE 1.17

    1.4 Has the Entity classified its financial liabilities as current, when they are due to be settled within

    twelve months after the balance sheet date, even if: MSE 1.18

    The Institute of Chartered Accountants of Pakistan 8

  • 8/7/2019 MSE Disclosure Checklist

    11/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    the original term was for a period longer than twelve months; and

    an agreement to refinance, or to reschedule payments, on a long-term

    basis is completed after the balance sheet date and before the financial

    statements are authorised for issue.

    1.5 Have additional line items, headings and subtotals been presented on the face of the

    balance sheet when such presentation is necessary to present fairly the Entitys financial position? MSE 1.20

    1.6 Has the Entity classified government grants related to assets (including non-monetary MSE 7.6

    grants at fair value) either:

    a. as deferred income; or

    b. as a deduction in arriving at the carrying amount of the asset.

    1.7 Are assets and liabilities presented separately and not offset ? MSE 1.10

    1.8 Whichever method of presentation is adopted, has the Entity disclosed for MSE 1.15

    each asset and liability item that combines amounts expected to be

    recovered or settled both before and after twelve months from the balance

    sheet date, the amount expected to be recovered or settled after more than twelve months?

    2.0 SHARE CAPITAL

    2.1 Is the Share capital classified under the following sub-heads, namely: Sch II.6(i)

    2.1.1 Issued, subscribed and paid up capital, distinguishing in respect of each

    class between:-

    a. shares allotted for consideration paid in each;

    b. shares allotted for consideration other than cash, showing separately

    shares issued against property and others (to be specified); and

    c. shares allotted as bonus shares?

    2.2 MSE 1.21(a)

    a. the number of shares authorized;

    b. the number of shares issued and fully paid, and issued but not fully paid;

    c. par value per share, or that the shares have no par value;

    d. a reconciliation of number of shares outstanding at beginning and end of the

    year;

    e. the rights, preferences and restrictions attaching to each class of share

    capital including restrictions on the distribution of dividends and the

    repayment of capital;

    f. shares in the Entity held by the Entity itself ; and

    g. shares reserved for issuance under options and sales contracts, including

    the terms and amounts?

    3.0 RESERVES

    3.1 Are the reserves, distinguished between capital reserves and revenue reserves? Sch II.6(ii)

    Offsetting may also take place where gains, losses and related expenses arising from the same or

    similar transactions are not material.

    For each class of share capital , have the following been disclosed either on the face of the balance

    sheet or in the notes:

    The Institute of Chartered Accountants of Pakistan 9

  • 8/7/2019 MSE Disclosure Checklist

    12/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    3.2 Has the Entity disclosed a description of the nature and purpose of each

    reserve within owners' equity? MSE 1.21(b)

    4.0 SURPLUS ON REVALUATION OF FIXED ASSETS

    4.1 Have fixed assets been revalued? Sch II.7

    4.2 MSE 3.15

    4.3 MSE 3.17

    4.4 MSE 3.18

    a.

    b.

    4.5 MSE 3.18

    4.6 MSE 3.19

    4.7 Has the Entity credited the increase directly to 'Surplus on Revaluation of Fixed assets accounts and Sch II. 7

    disclosed in the balance-sheet of the Entity after Capital and Reserves as specified in section 235 of the CO84 Sec. 235

    Companies Ordinance, 1984 (XLVII of 1984) and SRO 45(I)/2003 dated January 13, 2003? MSE 3.20

    4.8 CO84 Sec.

    235

    MSE 3.22

    4.9 MSE 3.24

    5.0 NON-CURRENT LIABILITIES

    5.1.1 In the case of a entity which is not a Small-sized Entity , has the Entity classified its non-current Sch II. 8(A)

    liabilities under appropriate sub-heads as:

    (i) long term f inancing;

    ( ii ) debentures;

    (iii) liabilities against assets subject to finance lease;

    (iv) long term murabaha;

    (v) long term deposits; and

    (vi) deferred liabilities.

    5.1.2 In the case of a Entity which is not a Small-sized Entity, have the long term Sch II. 8(B)

    loans been classified as secured and unsecured, showing separately under each class:

    (i) loans from banking companies and other financial institutions, other

    than those as specified in clause (ii) below;

    (ii) loans from related parties; and

    ( ii i) other loans.

    5.1.3 Have long-term deposits been classified according to their nature? Sch II. 8(C)

    Have the revaluations been made with sufficient regularity to ensure that the carrying amount does not

    differ materially from fair value at the balance sheet date?

    When there is no evidence of marketvalue because of thespecialised natureof the plant and equipment

    and because these items are rarely sold, except as part of a continuing business, has the Entity valued

    them at their depreciated replacement cost?

    When an item of property, plant and equipment is revalued, has any accumulated depreciation at the

    date of the revaluation is either:

    Restated proportionatelywith the change in the gross carrying amount of the asset so that the

    carrying amount of the asset after revaluation equals its revalued amount (this method is often

    used when an asset is revalued by means of an index to its depreciated replacement cost); or

    Eliminated against the gross carrying amount of the asset and the net amount restated to the

    revalued amount of the asset. For example, this method is used for buildings that are revalued t

    their market value.

    Does the amountof theadjustment arising on therestatementor elimination of accumulated depreciation

    form part of the increase or decrease in carrying amount?

    When an item of property, plant and equipment is revalued, has the entire class of property, plant and

    equipment to which that asset belongs been revalued?

    If an assets carry ing amount is decreased as a resul t of a revaluat ion, has the decrease been

    recognised in profit or loss account?

    Is an amountof incremental depreciationfor the periodtransferred from Surplus on Revaluation of Fixed

    Assets Account to unappropriated profit / accumulated loss through Statement of Changesin Equity torecord realisation of surplus?

    The Institute of Chartered Accountants of Pakistan 10

  • 8/7/2019 MSE Disclosure Checklist

    13/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    5.2 Leases Disclosures by Lessee

    Finance Lease

    5.2.1 Have the following disclosures been made for finance leases : MSE 4.9

    a. for each class of asset, the net carrying amount at the balance sheet date;

    b. a reconciliation between the total of future minimum lease payments at the

    balance sheet date, and their present value. In addition, a Entity

    should disclose the total of future minimum lease payments at the balance

    sheet date, and their present value, for each of the following periods:

    i) not later than one year?

    ii) later than one year and not later than five years?

    iii) later than five years?

    c. contingent rents recognized as an expense for the period?

    Lease Payments under Operating Leases

    5.2.2 MSE 4.12

    i) not later than one year;

    ii) later than one year and not later than five years;

    iii) later than five years;

    Sale and leaseback transactions

    Finance Lease

    5.2.3 MSE 4.14

    Operating Lease

    5.2.4 MSE 4.15

    5.2.5 MSE 4.15

    5.2.6 MSE 4.15

    5.2.7 MSE 4.16

    5.3 Deferred Liabilities and Employee Benefits

    Postemployment Benefits: Defined Contribution Plans

    5.3.1 MSE 17.6

    a. has the contribut ionpayableby the employerfor a yearbeen charged toprof it orloss

    for the year?

    Has the Entity (the lessee ) disclosed the total of future minimum lease payments under non

    cancelable operating leases for each of the following periods:

    If a sale and leaseback transactionresults in a finance lease, has any excess of sales proceeds

    over the carrying amount been deferred and amortised over the lease term and not immediately

    recognised as income in the financial statements of a seller-lessee?

    I f a sale and leaseback t ransact ion resul ts in an operating lease and i t is c lear that the

    transaction is established at fair value, has any profit or loss recognised immediately?

    If the sale price is below fair value, has any profit or loss been recognised immediately except

    that, i f the loss is compensated by future lease payments at below market price, it would be

    deferred and amortised in proportion to the lease payments over the period for which the asset

    is expected to be used?

    If the sale price is above fair value, has the excess over fair value been deferred and amortised

    over the period for which the asset is expected to be used?

    Has a loss equal to the amount of the dif ference between the carrying amount and fair value

    been recognised immediately, if the fair value at the time of a sale and leaseback transaction isless than the carrying amount of the asset?

    In respect of retirement benefits in the form of provident fund and other defined contribution

    schemes:

    The Institute of Chartered Accountants of Pakistan 11

  • 8/7/2019 MSE Disclosure Checklist

    14/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    b has any shortfall of the contribut ionpaid comparedto the amount payable for the year

    also been charged to profit or loss for the year?

    c. i f contr ibution paid is in excess of the amount payable for the year, has the excess

    been treated as a prepayment?

    5.3.2 MSE 17.7

    a.

    b.

    Postemployment Benefits: Defined Benefit Plans

    5.3.2 MSE 17.8

    a.

    b.

    c.

    5.3.3 MSE 17.9

    5.3.4 MSE 17.11

    5.3.5 MSE 17.12

    When an employee has rendered serv ice dur ing a per iod, has the Enti ty recognised the

    contribution payable to a defined contribution plan in exchange for that service:

    as a liability (accrued expense), after deducting any contribution already paid. If the contribution

    already paid exceeds the contribution due for service before the balance sheet date, has the

    excess been recognised as an asset (prepaid expense) ; and

    as an expense, unless another section requires or permits the inclusion of the contribution in the

    cost of an asset.

    In respect of gratuity benefit and other defined benefit schemes, has the accounting treatment

    depended on the type of arrangement which the employer chosen:

    If the payment for retirement benefitsis made out of its own funds,has an appropriate charge to

    the statement of profit and loss for the year been made through a provision for the accruing

    liability and it is calculated according to actuarial valuation?

    Liability for retirement benefits is funded through creation of a trust:

    i. Has the cost incurred for the year been determined actuarially? Has actuarial valuation been

    conducted at least once in every three years?

    ii. If the actuarial valuations are not conducted annually, has the actuarys report specified the

    contributions to be made by the employer on an annual basis during the inter valuation period?

    iii. Has the annual contribution (which is in addition to the contribution that may be required to

    finance unfunded past service cost) reflected proper accrual of retirement benefit cost for each

    of the years during the inter valuation period and been charged to the statement of profit and

    loss for each such year?

    iv. Where the contributionpaid during a year is lower than the amount required to be contributed

    during the year to meet the accrued liability as certified by the actuary, has the shortfall been

    charged to the statement of profit and loss for the year?

    v. Where the cont ribution paid dur ing the year is in excess of the amount required to be

    contributed, as certified by the actuary, has the excess been treated as a prepayment?

    Liability for retirement benefits is funded through a scheme administered by an insurer:

    i. Has an actuarial certificate or a confirmation from the insurer been obtained?

    ii. Where the contributionpaidduring a year is lower than the amount required to be contributed

    during the year to meet the accrued liability as certified by the actuary, has the shortfall been

    charged to the statement of profit and loss for the year?

    iii. In case of excess contribution of the amount, has the excess been treated as a prepayment?

    Where actuarial valuation is conducted, has it been in accordance with requirementsof IAS19

    Employee Benefits?

    When a ret irement benefit scheme is amended with the result that addit ional benefits are

    provided to retired employees, has the cost of the additional benefits been accounted for in

    accordance with MSE 17.8?

    Have the financial statements disclosed the method by which retirement benefit costs for the

    period have been determined?

    The Institute of Chartered Accountants of Pakistan 12

  • 8/7/2019 MSE Disclosure Checklist

    15/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    5.3.6 MSE 17.12

    5.4 Deferred Taxation

    5.4.1 MSE 11.11

    5.4.2 MSE 11.13

    a. has a legally enforceable right to set off the recognised amounts; and

    b. in tends either to settle on a net basis or to realise the asset and settle the liability

    simultaneously.

    5.4.3 Has the Entity disclosed the amount of a deferred tax asset and the nature of the evidence

    supporting its recognition, when: MSE 11.15

    a. the utilization of the deferred tax asset is dependent on future taxable profits

    in excess of the profi ts arising f rom the reversal of existing taxable temporary

    differences? and

    b. the Entity has suffered a loss in either the current or preceding period

    in the tax jurisdiction to which the deferred tax asset relates?

    5.4.4 MSE 11.16

    5.5 Taxation

    5.5.1 MSE 11.11

    5.5.2 MSE 11.13

    5.5.3 MSE 11.13

    a. has a legally enforceable right to set off the recognised amounts; and

    b. intends either to sett le on a net basis or to realise the asset and settle the l iabi li ty

    simultaneously.

    6.0 CURRENT LIABILITIES

    6.1 Have the current liabilities and provisions been classified under the following sub-heads, Sch II. 9

    so far as these are appropriate to the Entity's business:

    6.1.1 Trade and other payables, classified as:

    (a) creditors;

    (b) murabaha;

    (c) accrued l iabil it ies;

    (d) advance payments;

    (e) payable to employee retirement benefit funds;(f) unpaid and unclaimed dividend; and

    (g) others ( to be specified, if material)

    6.1.2 Interest, profit, return or mark-up accrued on loans and other payables;

    6.1.3 Short term borrowings classified as:

    a. short-term borrowings, distinguishing between secured and unsecured

    and between loans taken from:

    i. banking companies and other financial institutions other than related

    parties;

    In case the costs related to gratuity andother defined benefit schemes are based on an actuarial

    valuation, has the financial statements disclosed whether the actuarial valuation was made at

    the end of period or at an earlier date? has the date of the actuarial valuation been specified and

    the method by which the accrual for the period determinedif the same is notbased on the report

    of the actuary?

    Are deferred tax assets and liabilities, if recognised, distinguished from current tax assets and

    liabilities?

    Has the Entity offset deferred tax assets and de ferred tax liabilities if, and only if, it:

    Has the Enti ty disclosed the amount (and expiry date, i f any) of deductible temporary

    dif ferences, unused tax losses, and unused tax credits for which no deferred tax asset is

    recognised in the balance sheet?

    Have tax assets and tax liabilities been presented separately from other assets and liabilities in

    the balance sheet?

    Has the Entity offseted current tax assets and current tax liabilities?

    Entity can offset if and only if it:

    The Institute of Chartered Accountants of Pakistan 13

  • 8/7/2019 MSE Disclosure Checklist

    16/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    i i. related part ies; and

    iii. others;

    b. short-term running finance, distinguishing between secured and unsecured;

    iv. current portion of long term borrowings;

    v. current portion of long term murabaha; and

    vi. provision for taxation, showing separately income tax and other taxes.

    Provisions

    6.2 Has the Entity disclosed whether the amount been discounted? MSE 8.9

    6.3 For each class of provision, has the Entity disclosed: MSE 8.25

    a. the carrying amount at the beginning and end of the period?

    b.

    c. additional provisions made in the period, including increases to existing provisions?

    d. amount used (i.e. incurred and charged against the provision) during the period?

    e. unused amounts reversed during the period?

    f. the increase during the period in the discounted amount arising from the passage of

    time and the effect of any change in the discount rate?

    g.

    Short Term Employee Benefits

    6.4 MSE 17.2

    a.

    b.

    6.5 MSE 17.3

    a.

    b.

    7.0 CONTINGENCIES

    7.1

    7.1.1 aggregate amount of any guarantees given by the Entity on behalf of any Sch II . 10(i)

    related party and where practicable, the general nature of the guarantee;

    7.2 MSE 8.5

    7.3 MSE 8.8

    a brief description of the nature of the obligation and the expected timing of any resulting

    outflows of economic benefits?

    a brief description of the nature of the obligation and the expected timing of any resulting

    outflows of economic benefits including an indication of the uncertainties about the amount or

    timing of those outflows. Where necessary to provide adequate information, an entity shall

    disclose the major assumptions made concerning future events.

    When an employee rendered service to the Entity during an accounting period, has it recognised theundiscounted amount of short-term employee benefits expected to be paid in exchange for that service:

    as a liability (accrued expense), after deducting any amount already paid.

    as an expense.

    Has the cost of short-term employee benefits in the form of compensated absences been recognised as

    follows:

    in the case of accumulating compensated absences, when the employees render service that

    increases their entitlement to future compensated absences; and

    in the case of non-accumulating compensated absences, when the absences occur.

    In case of a Entity which is not a Small-sized Entity, whether a footnote to the balance sheet has been

    added, showing separately, -

    Has the Entity disclosed a contingent liability, as required by MSE 8.26?

    Has the Entity disclosed a contingent asset as requ ired by paragraph 8.27 of MSE Standard?

    The Institute of Chartered Accountants of Pakistan 14

  • 8/7/2019 MSE Disclosure Checklist

    17/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    7.4 MSE 8.26

    7.5 MSE 8.27

    7.6 MSE 8.28

    7.7 In extremely rare cases, disclosure of some or all of the information required by 8.25 - 8.27 above MSE 8.29

    can be expected to prejudice seriously the position of the Entity in a dispute with other

    parties on the subject matter of the provision, contingent liability or contingent asset. In such

    cases, has the Entity disclosed the general nature of the dispute, together with the fact ,

    and reason why, the information has not been disclosed?

    8.0 COMMITMENTS

    8.1 Has a footnote to the balance sheet been added, showing separately :

    a. where practicable the aggregate amount or estimated amount, if it is material, Sch II . 10(ii)

    of contracts for capital expenditure, so far as not provided for or a statement

    that such an estimate can not be made;

    b. any other commitments, if the amount is material indicating the general nature of Sch II . 10(iii)

    commitment.

    9.0 EVENTS AFTER THE BALANCE SHEET DATE

    9.1 MSE 14.1

    9.2 MSE 14.4

    9.3 Has the Entity updated disclosure in respect of the information received after the

    balance sheet date about conditions that existed at the balance sheet date? MSE 14.6

    9.4 Has the Entity disclosed the following information for each significant category of MSE 14.7

    non-adjusting event after the balance sheet date:

    a. the nature of event?

    b. an estimate of the financial effect, or a statement that such an estimate cannot be made?

    9.5 MSE 14.9

    10.0 FIXED ASSETS (OTHER THAN INVESTMENTS)

    10.1 Property, Plant & Equipment

    10.1.1 Have the fixed assets, other than investments, been classified under appropriate

    sub-heads; duly itemised such as:- Sch II.1

    (i) Property, plant and equipment:

    (a) land (distinguishing between free-hold and leasehold);

    (b) buildings (distinguishing between buildings on free-hold land and

    Unless the possibility of any outflow in settlement is remote, has the Entity disclosed for each class of

    contingent liability at the balance sheet date a brief description of the nature of the contingent liability

    and, an estimate of its financial e ffect, measured under paragraphs 8.9 and 8.10 of MSE Standard?

    Further has the Entity disclosed an indication of the uncertainties relating to the amount or timing of any

    outflow and the possibility of any reimbursement?

    Where an inflow of economic benefits is probable, has the Entity disclosed a brief description of the

    nature of the contingent assets at the balance sheet date and an estimate of their financial effect,

    measured using the principles set out for provisions in paragraphs 8.9 and 8.10?

    Where any of the information required by paragraphs 8.26 and 8.27 is not disclosed because it is not

    practicable, has that fact been stated?

    Has the Entity adjusted the amounts recognised in its financial statements to reflect adjusting events

    after the balance sheet date?

    Has the Entity recognised non-adjusting events after the balance sheet date in its financial statements ?

    Has the Entity recognised dividends as a liability at the balance sheet date if dividends are proposed or

    declared after the balance sheet date?

    The Institute of Chartered Accountants of Pakistan 15

  • 8/7/2019 MSE Disclosure Checklist

    18/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    those on leasehold land);

    (c) plant and machinery;

    (d) furniture and fittings;

    (e) vehicles;

    (f) office equipment;

    (g) capital work in progress indicating significant item wise details;

    (h) development of property; and

    (i) others (to be specified).

    ( ii ) Intangible:

    (a) goodwill;

    (b) brands names;

    (c) computer software;

    (d) licences and franchises;

    (e) patents, copyright, trade marks and designs;

    (f) others (to be specified)

    10.1.2 MSE 3.38

    a) the measurement basis used for determining the gross carrying amount (when more

    than one basis has been used, the gross carrying amount for that basis in each

    category shall be disclosed);

    b) the depreciation methods used;

    c) the useful lives or the depreciation rates used;

    d) the gross carrying amount and the accumulated depreciation at the beginning

    and end of the period, (aggregated with accumulated impairment losses)

    e) a reconciliation of the carrying amount at the beginning and end of the period showing:

    i) additions;

    ii) disposals;

    iv) increases or decreases during the period resulting from revaluations ;

    v) impairment losses recognized in income statement during the period (if any);

    vi) impairment losses reversed in income statement during the period (if any);

    vi i) depreciat ion;

    ix) other movements.

    10.1.3 MSE 3.39

    10.1.4 When items of property, plant and equipment are stated at revalued amounts, has the following

    been disclosed: MSE 3.40

    a. the basis used to revalue the assets;

    b. the effective date of the revaluation;

    c. whether an independent valuer was involved?

    10.2 Assets subject to finance lease

    Have the financial statements disclosed, for each class of property, plant and equipment, the

    following:

    Has the existence and amounts of restrictions on title as well as property, plant and equipment

    pledged as security for liabilities been disclsoed in the financial statements?

    The Institute of Chartered Accountants of Pakistan 16

  • 8/7/2019 MSE Disclosure Checklist

    19/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    10.2.1 Has the Entity disclosed the net carrying amount of each class of asset subject to MSE 4.9(a)

    finance lease as at the balance sheet date?

    10.3 Government Grants

    10.3.1 Has the following been discloed: MSE 7.14

    a. the accounting policy adopted for government grants;

    b. the methods of presentation adopted in the financial statements;

    c. disclosure of the nature and extent of the government grants recognized in

    the financial statements, and an indication of other forms of

    government assistance from which the Entity has directly benefited;

    d. unfulfilled conditions and other contingencies attaching to government

    assistance that have been recognized.

    10.4 Intangible Assets

    10.4.1 MSE 5.26

    a. whether the useful l ives are indef in ite or fini te and, i f fini te, the useful l ives or the

    amortisation rates used;

    b. the amortisation methods used for intangible assets with finite useful lives;

    c . the gross carrying amount and the accumulated amortisation (aggregated with

    accumulated impairment losses) at the beginning and end of the period;

    d. the line item(s) of the income statement in which the amort isat ion of intangibleassets

    is included; and

    e. a reconciliation of the carrying amount at the beginning and end of the period showing:

    (i) retirements and disposals;

    (ii) impairment losses recognised;

    (iii) impairment losses reversed;

    (iv) amortisation recognised during the period; and

    (v) additions and other changes in the carrying amount during the period.

    Comparative information is not required.

    10.4.2 MSE 5.27

    a. for an intangible asset assessed as having an indefinite useful life, the carrying amoun

    of that asset and the reasons supporting the assessment of an indefinite useful life. In

    giving these reasons, also describe the factor(s) that played a significant role in

    determining that the asset has an indefinite useful life.

    b. a description, the carrying amount and remaining amortisation period of any individualintangible asset that is material to the entitys financial statements.

    c. for intangible assets acquired by way of a government grant and initially recognised at

    fair value:

    (i) the fair value initially recognised for these assets;

    (ii) their carrying amount; and

    ( ii i) whether they are measured after recognit ion under the cost model or the

    revaluation model.

    Has the Entity disclosed the following in the financial statements for each class of intangible

    assets, distinguishing between internally generated intangible assets and other intangible

    Has the following been disclsoed in the financial statements:

    The Institute of Chartered Accountants of Pakistan 17

  • 8/7/2019 MSE Disclosure Checklist

    20/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    d. the existence and carrying amounts of intangible assets whose title is restricted and

    the carrying amounts of intangible assets pledged as security for liabilities.

    e. the amount of contractual commitments for the acquisition of intangible assets.

    10.5 Borrowing Cost

    10.5.1 Has the following been disclosed in the financial statements : MSE 10.13

    a. the accounting policy adopted for borrowing costs;

    b. the amount of borrowing costs capitalised during the period; and

    c. the capitalisation rate used to determine the amount of borrowing costs eligible for

    capitalisation?

    11.0 LONG-TERM INVESTMENTS

    11.1 Have aggregate amounts in respect of the following been shown under separate sub-heads:- Sch II.2(A)

    i. investments in related parties;

    i i. other investments.

    11.2 Sch II.2(B)

    a. held to maturity investments, which are not due to mature within next twelve months;

    b. available for sale investments, which are not intended to be sold within next twelve

    months, and

    c. market value of listed securities and book value of unlisted securities as per their latest

    available financial statements.

    11.3 Are investments classified into: MSE 16.1

    a. financial assets at fair value through profit or loss;

    b. held to maturity investments;

    c . available for sale

    11.4 Gains and Losses

    11.4.1 MSE 16.9(a)

    11.4.2 For available-for-sale financial assets, has the following been disclosed: MSE 16.9(b)

    a. the amount of any gain or loss that was recognised in equity through the

    statement of changes in equity; and

    b. in case the investment is derecognised, is the cumulative gain or loss previously

    recognised in equity, now reported in net profit or loss for the period.

    11.4.3 MSE 16.10

    11.5 Reclassification

    11.5.1 MSE 16.4

    11.5.2 MSE 16.5

    11.5.3 MSE 16.5

    An Entity which is not a Small-Sized Entity, has the following been disclosed for the purposes of clauses

    (i) and (ii) of 12.1 above:

    Has the gain /loss been recognised in profit or loss, in case of an investment classified as at fair

    value through profit or loss?

    For investments carried at amortised cost, has a gain or loss been recognised in profit or loss

    when an investment is derecognised or impaired, and through the amortisation process?

    Has the Entity reclassifid an investment into or out of the fair value through profit or loss

    category while it is held or issued?

    If it is no longer appropriate to classify an investment as heldto-maturity,has it been reclassified

    as available for sale and remeasured at fair value?

    Has the difference between carrying amount and fair value been accounted for in accordance

    with para 12.4.2 above?

    The Institute of Chartered Accountants of Pakistan 18

  • 8/7/2019 MSE Disclosure Checklist

    21/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    11.5.4 MSE 16.7

    MSE 16.8

    11.5.5 MSE 16.8

    11.6 Impairment

    Held-to-maturity investments

    11.6.1 MSE 16.11

    11.6.2 MSE 16.12

    Investments Carried at Cost

    11.6.3 MSE 16.13

    Have such impairment losses been reversed?

    Available-for-Sale Investments

    11.6.4 MSE 16.14

    MSE 16.15,

    MSE 16.16

    11.6.5 MSE 16.17

    11.7 Disposals of Investments

    11.7.1 MSE 16.18

    a. the carrying amount; and

    b. the sum of (i) the consideration received and (ii)any cumulat ive gain or loss thatwas

    recognised directly in equity been recognised in profit or loss?

    11.8 Disclosures

    11.8.1 MSE 16.19

    (i) information about the extent and nature of investment, including significant terms and

    conditions that may affect the amount, timing and certainty of future cash flows; and

    (ii) the accounting policies and methods adopted, including the criteria for recognition and

    the basis of measurement applied.

    11.8.2 MSE 16.20

    11.8.3 MSE 16.21

    If a reliable measure is available the investment is required to be measured at fair value, has the

    investment been remeasured at fair value, and the difference between its carrying amount and

    fair value accounted for in accordance with paragraph 12.4.1 and 12.4.2?

    If, as a result of a change in intention or ability or in the rare circumstance that a reliable

    measure of fair value is no longer available or because the two preceding financial yearsreferred to in the definition of held-to-maturity investments have passed, it becomes appropriat

    to carry an investment at cost or amortised cost rather than at fair value, the fair value carrying

    amount of the investment on that date becomes its new cost or amortised cost, as applicable.

    Is any previous gain or loss on the asset that has been recognised directly in equity in

    accordance with paragraph 12.4.2 above?

    Has the amount of the loss been recognised in profit or loss, if there is objective evidence that

    an impairment loss on held-to-maturity investments carried a t amortised cost incurred,?

    In case of reversal of im pairment loss, has the amount of the reversal been recognised in profit

    or loss?

    If impairment loss has been incurred on an unquoted equity instrument that is not carried at fair

    value, has the amount of the impairment loss been measured as the difference between the

    carrying amount of the investment and the present value of estimated future cash flows

    discounted at the current market rate of return for a similar investment?

    When there is an objective evidence that the asset is impaired, has the cumulative loss which

    was recognised directly in equity been removed and recognised in profit or loss?

    The amount of the cumulative loss that is removed from equity and recognised in profit or loss

    under paragraph 16.14 of MSE Standard is the difference between the acquisition cost (net of

    any principal repayment and amortisation) and current fair value, less any impairment loss on

    that investment previously recognised in profit or loss. Impairment losses recognised in profit or

    loss cannot be reversed through profit or loss.

    Has the reversal in the impairment loss been recognised in profit or loss?

    On disposal of an investment, has the difference between:

    For each class of investment, has the following been disclosed:

    Has the Entity disclosed the fair value of each class of investment, in a way that permits it to be

    compared with the corresponding carrying amount in the balance sheet.

    Has the Entity disclosed the following if investments in unquoted shares are measured at cost:

    The Institute of Chartered Accountants of Pakistan 19

  • 8/7/2019 MSE Disclosure Checklist

    22/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    a. the fact that fair value cannot be measured reliably,

    b. description of the investment,

    c. their carrying amount,

    d. an explanation of why fair value cannot be measured reliably and,

    e. the range of estimates within which fair value is highly likely to lie(if possible)?

    11.8.4 MSE 16.21

    a. the fact,

    b. the carrying amount of such investments at the time of sale and

    c. the amount of gain or loss recognised?

    11.8.5 MSE 16.22

    11.8.6 MSE 16.23

    11.8.7 MSE 16.24

    12.0 LONG TERM LOANS AND ADVANCES

    12.1 Sch II. 3(A)

    (i) loans and advances to related parties; and

    (ii) other loans and advances.

    12.2 Sch II. 3(B)

    12.3 Has provision been made for bad or doubtful loans and advances shown as a deduct ion Sch II . 3( C)

    under paragraph 13.1 above?

    13.0 LONG-TERM DEPOSITS AND PREPAYMENTS

    13.1 Has the Entity separately disclosed all material items related to: Sch II. 4

    (i) long-term deposits, and

    (ii) long-term prepayments.

    14.0 CURRENT ASSETS

    14.1 Sch II.5(A )

    (i) stores, spare parts and loose tools distinguishing, where practicable, each from the

    other;

    (ii) stock- in-trade distinguishing between appropriate classifications;

    (iii) trade debts other than loans or advances, showing separately debts considered good

    and debts considered doubtful or bad;

    (iv) loans and advances, showing separately those considered good and those considered

    doubtful or bad;

    (v) trade deposits and short term prepayments and current account balances withstatutory authorities.

    (vi) interest accrued;

    (vii) other receivables

    (viii) financial assets, other than as mentioned in clauses (iii) to (vii) above, and cash and

    bank balances;

    (ix) tax refunds due from the Government; and

    (x) cash and bank balances, distinguishing between current and deposit accounts, where

    applicable.

    14.2 Sch II.5(B).

    If investments are sold whose fair value previously could not be reliably measured, has the

    following been disclosed:

    Has the Entity disclosed the carrying amount of investments pledged as collateral for liabilities,

    the carrying amount of investments pledged as collateral for contingent liabilities, and any

    material terms and conditions relating to assets pledged as collateral?

    Has the Entity disclosed the reason for reclassification if it reclassified an investment measured

    at cost or amortised cost rather than at fair value?

    Has the Entity disclosed the nature and amount of impairment loss recognised in profit or loss

    separately for each significant class of investment?

    Has the following been shown under separate sub-heads, distinguishing between considered good and

    considered bad or doubtful of the Entitys:

    Has the Information on terms and conditions, securities obtained and any other material information bee

    disclosed?

    Have the current assets been classified under the following sub-heads appropriate to the Entitys affairs:

    Have the following particulars in the case of clauses (iii), (iv) and (viii) of 15.1 above been stated:

    The Institute of Chartered Accountants of Pakistan 20

  • 8/7/2019 MSE Disclosure Checklist

    23/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    14.3 Sch II.5( C)

    14.4 Sch II.5(D)

    14.5 Has the provision been made for diminution in the value of or loss in respect of any current asset Sch II.5(E).

    15.0 INVENTORIES

    15.1 Are the following disclosed in the financial statements:-

    a. the accounting policies adopted in measuring inventories including the cost formula used; MSE 6.6

    b. the total carrying amount of inventories and the carrying amount in classifications

    appropriate to the Entity; MSE 6.6

    c. the carrying amount of inventories carried at FV less cost to sell; MSE 6.6

    d. the amount of inventories recognised as an expense during the period; MSE 6.6

    e. the amount of any write-down of inventories recognised as an expense in MSE 6.6

    the period (refer MSE 6.5) ;

    f. the amount of any reversal of any write-down that is recognized as a reduction

    in the amount of inventor ies recognised as expense in the per iod ( refer MSE 6.5); MSE 6.6

    g. the circumstances or events that led to the reversal of a write down of

    inventories (refer MSE 6.5); and MSE 6.6

    h. the carrying amount of inventories pledged as security for liabilities. MSE 6.6

    (i) the aggregate amount due by directors and chief executive and executives of the Entity and

    any of them severally or jointly with any other person; and

    (ii) aggregate amount due by related parties, other than in clause (i) of 13.1 above; names to be

    specified in each case.

    Has the following amount in aggregate been disclosed in case of clause (iv) of 13.1 above:

    (i) investments in related parties; and

    (ii) other investments.

    Has the following been disclosed as investments under the head current assets, for the purposes of

    clause (i) and (ii) of 13.3 above, indicating separately:

    (i) held to maturity investments;

    (ii) available for sale investments; and

    (iii) held for trading.

    and shown as a deduction from the gross amount of the respective assets?

    The Institute of Chartered Accountants of Pakistan 21

  • 8/7/2019 MSE Disclosure Checklist

    24/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    PART III INCOME STATEMENT

    1.0 Has the profit and loss account been drawn up so as to disclose separately the

    manufacturing, trading and operating results. In the case of manufacturing concern, has the

    cost of goods manufactured also be shown? Sch. III. 1

    2.0 Whether the profit and loss account disclosed all material items of income and expenses

    including the following:- Sch. III. 2(A)

    (i) The turnover and showing as deduction therefrom trade discount and

    sales tax.

    (ii) Expenses, classified according to their function under the following

    sub-heads, along with additional information on their nature, namely:-

    (a) Cost of sales;

    (b) distribution cost;

    (c) administrative expenses;

    (d) other operating expenses; and

    (e) finance cost

    (iii) Other operating income, namely:-

    (I) Income from financial assets;

    (ii) income from investments in and debts, loans, advances and

    receivables to each related party; and

    (iii) income from assets other than financial assets.

    3.0 Sch. III. 2(B)

    4.0 Has the Entity disclosed other information relating to the following, namely:- Sch. III. 2(C)

    (I) debts written off as irrevocable distinguishing between trade debts,

    loans, advances and other receivables; and

    (ii) provisions for doubtful or bad debts distinguishing between trade

    debts, loans advances and other receivables.

    5.0 Has the Entity, as a minimum, on the face of the income statement disclosed the following line items: MSE 1.22

    a. revenue;

    b. the results of operating activities;

    c. finance costs;

    d. tax expense;

    e. net profit or loss for the period.

    6.0 MSE 1.23

    7.0 MSE 1.24

    8.0 MSE 1.26

    Has the Entity disclosed separately the amount of in terest on borrowings from related parties?

    Additional line items, headings and subtotals can be presented on the face of the income statement

    when such presentation is necessary to present fairly the Entity's financial performance.

    Have all items of income and expense recognised in a period been included in the determination of the

    net profit or loss unless the standard requires or permits otherwise?

    When items of income and expense within profit or loss from ordinary activities are of such size, nature

    or incidence that their disclosure is relevant to explain the performance of the Entity for the period, has

    the nature and amount of such items been disclosed separately?

    Has the Entity presented, either on the face of the income statement or in the notes to the income

    statement, an analysis of expenses using a classification based on either the nature of expenses or their

    function within the Entity?

    The Institute of Chartered Accountants of Pakistan 22

  • 8/7/2019 MSE Disclosure Checklist

    25/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    9.0 If the Entity classified expenses by function, has it disclosed additional information on the nature of expenses,

    including the following:-

    a. depreciation and amortization expense

    b. staff costs MSE 1.27

    10.0 MSE 1.28

    11.0 MSE 1.29

    12.0 MSE 1.10

    13.0 Has the following been disclosed:-

    a. the amount of each significant category of revenue recognized during MSE 9.11(b)

    the period including revenue arising from:

    i) the sale of goods?

    ii) the rendering of services?

    iii) interest?

    iv) royalties?

    v) dividends?

    b. the amount of revenue arising from exchange of goods or services MSE 9.11(c )

    included in each significant category of revenue.

    14.0 Sch. III 4

    (i) The aggregate amount charged in the financial statements in respect of

    the directors, chief executive and executives by the Entity as fees,

    remuneration, allowances, commission, perquisites or benefits or in any

    other form or manner and for any services and shall give full particulars

    of such aggregate amounts separately for the directors, chief executive

    and executives together with the number of such directors and

    executives, under appropriate heads, such as:

    (a) fees;

    (b) managerial remuneration;

    (c ) commission or bonus, indicating the nature thereof;

    (d) reimbursable expenses which are in the nature of a perquisite or benefit;

    (e) pension, gratuities, Entity's contribution to provident, superannuation

    and other staff funds, compensation for loss of office and in connection

    with retirement from office;

    (f) other perquisites and benefits in cash or in kind stating their nature and, where

    practicable, their approximate money values; and

    (g) the amounts, if material, by which any items shown above are

    affected by any change in an accounting policy.

    15.0 Has the Entity disclosed the amount of exchange differences recognised in profit or loss for the period? MSE 13.5

    16.0 MSE 13.3

    17.0 MSE 13.4

    18.0 MSE 13.4

    Has the Entitydisclosed, in the notes,the amountof dividends per share declared forthe periodcovered

    by the financial statements?

    Has the Entity presented any items of income and expense as extraordinary items, either on the face of

    the income statement or in the notes?

    Has offsetting taken place when items of gains, losses and related expenses are not material?

    Has the Entity stated the following by way of a note:

    Have the exchange differences arising on the settlement of monetary items at different rates at which

    they were initiallyrecorded duringthe period, beenrecognised as income or as expenses in the periodin

    which they arose?

    When a gain or loss on a non-monetary i tem is recognised direct ly in equity, has any exchange

    component of that gain or loss been recognised directly in equity?

    When a gain or loss on a non-monetary i tem is recognised in profi t or loss, has any exchange

    component of that gain or loss been recognised in profit or loss?

    The Institute of Chartered Accountants of Pakistan 23

  • 8/7/2019 MSE Disclosure Checklist

    26/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    19.0 MSE 6.5

    20.0 MSE 6.5

    21.0 MSE 6.5

    22.0 MSE 3.36

    22.0 a MSE 3.36

    23.0 MSE 5.5

    24.0 MSE 5.25

    25.0 Gains and losses in Investment

    25.1 When there is a change in the fair value of a financial asset or financial liability MSE 16.9

    has the gain or loss been recognised as follows:

    a. A gain or loss on an invesment classified as at fair value

    to be recognised in profit or loss.

    b. A gain or loss on an available-for-sale investment to be recognised

    directly in equity, through the statement of changes in equity

    except for impairment losses and foreign exchange gains and losses

    until the investment is derecognised, at which time the cumulative gain

    or loss previously recognised in equity, is recognised in profit or loss.

    25.2 MSE 16.9

    25.3 For investment carried at amortised cost, has a gain or loss been recognised

    in profi t or loss when the investment is derecognised or impaired, and through MSE 16.10

    the amortisation process?

    26.0 Related Party Transactions

    26.1 Has the Entity disclosed the following information: MSE 15.3

    a. the relat ionship between parent and subsidiary (irrespective of whether there have

    been transactions between them);

    b. the name of the Entitys parent;

    c. if different (from b) the ultimate controlling party; or

    d. if neither the Entitys parent nor the ultimate controlling party produces

    financial statements available for public use, the name of the next most senior parent.

    26.2 I f there have been transact ions between related parties , has the Enti ty disc losed: MSE 15.4

    a. the nature of the related party relationship; and

    b. information about the transactions and outstanding balances necessary for

    an understanding of the potential effect of the relationship on the financial

    statements including at a minimum, the following disclosures:

    (i) the amount of the transactions;

    When inventories are sold, has the carrying amount of those inventories been recognized as an

    expense?

    Has the amount of any write-down of inventories to net realisable value and all losses of inventories

    been recognised as an expense in the period in which the write-down or loss occurs?

    Has the amount of any reversal of any write-down of inventories arising from an increase in net

    realisable value recognised as a reduction in the amount of inventories been recognised as an expense

    in the period in which the reversal occurs?

    Has the gain or loss of an item of property, plant and equipment been included in profit or loss when the

    item is derecognised?

    Has the gain been classified as revenue?

    Has the interest calculated using the effective interest method been recognised in profit or loss?

    Has the expenditure on research (or on the research phase of an internal project) been recognised as a

    expense when it is incurred?

    Whether gains or losses arising from the retirement or disposal of an intangible asset been determined

    as the difference between the net disposal proceeds and the carrying amount of the asset recognised as

    income or expense in the income statement?

    The Institute of Chartered Accountants of Pakistan 24

  • 8/7/2019 MSE Disclosure Checklist

    27/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    (ii) the amount of outstanding balances and:

    their terms and conditions, including whether they are secured, and

    the nature of the consideration to be provided in settlement; and

    details of any guarantees given or received;

    (iii) provisions for doubtful debts related to the amount of outstandingbalances; and

    (iv) the expense recognised during the period in respect of bad or doubtful

    debts due from related parties.

    26.3 Has the Entity disclosed the following transactions (examples), if they are with a related party: MSE 15.5

    a. purchases or sales of goods (finished or unfinished);

    b. purchases or sales of property and other assets;

    c. rendering or receiving of services;

    d. leases;

    e. transfer of research and development;

    f. transfer under licence agreements;

    g. transfers under finance arrangements (including loans and equity

    contributions in cash or in kind);

    h. provision of guarantees or collateral; and

    i. settlement of liabilities on behalf of the Entity or by the Entity on behalf of another party.

    26.4 MSE 15.6

    26.5 MSE 15.7

    27.0 INCOME TAX

    27.1 MSE 11.9

    a. transaction or event which is recognised, in the same or a dif ferent period, directly in

    equity); or

    b. business combinat ion.

    27.2 MSE 11.10

    27.3 Are the major components of tax expense (income) disclosed separately ? MSE 11.14

    Are the items of similar nature disclsoed in aggregate?

    Have current and deferred tax been recognised as income or an expense andincluded in profit

    or loss for the period, except to the extent that the tax arises from a:

    Have current and deferred tax been charged or credited directly to equity if the tax relates to

    items that credited or charged in the same or a different period directly to equity?

    If related party transactions were made on terms equivalent to those that prevail in arms length

    transactions, has the disclosures made only if such terms substantiated?

    The Institute of Chartered Accountants of Pakistan 25

  • 8/7/2019 MSE Disclosure Checklist

    28/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    PART IV CASH FLOW STATEMENT

    1.0 MSE 2.1

    2.0 Has the Entity report cash flows from operating activities using either: MSE 2.5

    a. the direct method, whereby major classes of gross cash receipts and gross

    cash payments are disclosed? or

    b. the indirect method, whereby net profit or loss is adjusted for the effects of

    transactions of non-cash nature, any deferrals o r accruals of past or future

    operating cash receipts or payments, and items of income or expense

    associated with investing or financing cash flows?

    3.0 Has the Entity reported separately major classes of gross cash receipts and gross MSE 2.6

    cash payments arising from investing and financing activities, except to the extent

    that cash flows are reported on a net basis in accordance with MSE 2.7?

    4.0 Has the Entity decided to report cash flows from the following operating, investing or MSE 2.7

    financing activities on a net basis:

    a. cash receipts and payments on behalf of customers when the cash flows

    reflect the activities of the customers rather than those of the Entity; and

    b. cash receipts and payments for items in which the turnover is quick, the

    amounts are large, and the maturities are short?

    5.0 MSE 2.8

    6.0 If investing and financing transactions are excluded from the cash flow statement are such transactions

    disclosed elsewhere in the financial statements in a way that provides all the relevant information

    about these investing and financing activities? MSE 2.9

    7.0 Has the disclosure made of the components of cash and cash equivalents and a reconciliation

    of the amounts in cash flow statement been presented with the equivalent items reported

    in the balance sheet? MSE 2.10

    8.0 Are cash flows from interest and dividends received and paid, disclosed separately?

    Are they classified in a consistent manner from period to period as either operating,

    investing or financing activities? MSE 2.11

    9.0 Are cash flows arising from income taxes separately disclosed and classified as cash flows from

    operating activities unless they can be specifically identified with financing and investing activities? MSE 2.12

    10.0 MSE 2.15

    Have the cash flows arising from transactions in a foreign currency been recorded in a Entitys reporting

    currency by applying to the foreign currency amount the exchange rate between the reporting currency

    and the foreign currency at the date of the cash flow?

    Ha sthe Enity disclosed the amount of significant cash and cash equivalent balances that are not

    available for use by the Entity, together with a commentary by management?

    Is the cash flow statement during the period classified into operating, investing and financing activities?

    The Institute of Chartered Accountants of Pakistan 26

  • 8/7/2019 MSE Disclosure Checklist

    29/29

    Para #

    YES NO N/A

    DISCLOSURE MADE

    PART V STATEMENT OF CHANGES IN EQUITY

    5.1 Has the Entity presented a statement as a separate component of its financial statements showing:- MSE 1.30

    a. the net profit or loss for the period;

    b.

    c.

    5.2 In addition to 5.1 above has the Entity presented, either within the statement or in the notes he following?

    d. MSE 1.30

    e.

    f.

    E/SME Stadnards/MSE Diclosure Checklist/MSE Disclsoure checklist (final for website)

    capital transactions with owners and distributions to owners;

    the balance of accumulated profit or loss at the beginning of the period and at the balance sheet

    a reconciliation between the carrying amount of each class of equity capital, share premium and

    each item of income and expense that, as required by other Standards, is recognised directly in

    the cumulative effect of changes in accounting policies and corrections of fundamental errors