Schedule III financial statements (India)¶

KhataOS draws up the Balance Sheet, the Statement of Profit and Loss and the notes to accounts in the Schedule III format (Companies Act 2013). It supports two layouts:

Division I, for companies that follow Accounting Standards. This is the default.
Division II, for Ind AS companies.

The statements start from the Tally-style default groups and apply the company's own mapping on top. Both statements use the vertical format, with a Note No. column and the previous period's figures alongside.

Where things live¶

Mapping and statements: crates/khata-in/src/schedule3.rs.
balance_sheet and profit_and_loss give Division I.
ind_as_balance_sheet and ind_as_profit_and_loss give Division II.
Also in this file: Mapping, parse_code, validate, line_options, Rounding, DEFAULT_MAPPING and DIVISION2_DEFAULTS.
Notes and ratios: crates/khata-in/src/schedule3_notes.rs.
statements::<LineItem | IndAsLine> builds them for a given division.
company_statements reads the division, mapping and rounding from the company profile.
Stored settings: the company profile in khata-core, with four additive fields:
schedule3_map (group → line code);
msme_parties;
schedule3_division;
schedule3_rounding.

The setters are Book::set_schedule3_mapping, set_msme_party and set_schedule3_format. The core stores the codes as opaque strings and checks only their shape: lower-case letters, digits and _ : ,, at most 64 characters. The India pack checks what the codes mean, before saving and again when reading. Every change is an audit-trail entry, so it syncs and replays. - Print (A4 HTML): in khata_print. - schedule3_statement_html prints either statement in the rounding unit. - schedule3_notes_html prints the notes. - The older schedule3_balance_sheet_html and schedule3_profit_and_loss_html still print in rupees. - Desktop commands (apps/desktop/src-tauri/src/schedule3.rs): - Statements: schedule3_balance_sheet and schedule3_profit_and_loss. Both now follow the company's division and rounding. - Notes: schedule3_statements and print_schedule3_notes. - Mapping: schedule3_mapping, schedule3_line_options, set_schedule3_mapping, set_schedule3_msme and set_schedule3_format. Changing the mapping needs the Accountant role. - Screens (apps/desktop/src/screens/schedule3.ts): - Schedule3BalanceSheet and Schedule3ProfitLoss show the statements. - Schedule3Notes lists the notes. Enter opens a note; Enter on a ledger row in a note opens that ledger. - Schedule3Mapping shows the group tree with each group's Division I and Division II line. - Enter on a group chooses its line, or restores the default. - Enter on a supplier toggles MSME. - Enter on the first two rows changes the division or the rounding unit.

Requirements this follows¶

All of these are cited, with confidence tags, in docs/research/india-schedule-3.md (MCA notification of 24 Mar 2021, ICAI Guidance Notes), which adds to §3 of docs/research/india-compliance.md.

Division I and Division II line items, with a previous-year column.
The 2021 amendments:
MSME and other trade payables shown separately;
ageing schedules for receivables, payables and CWIP;
current maturities of long-term borrowings shown under short-term borrowings;
"Total Income";
mandatory rounding by total income;
promoter shareholding;
the eleven ratios, with reasons for any change over 25%;
the additional regulatory information.
Whether anything was amended after 2021 is [UNCERTAIN]. We found no amendment up to October 2026.

The headings follow the MCA text as read for that page.

Default mapping¶

Default groups are matched by their stable id (GroupId::default_named), never by display name, so renaming a group (for example "Sundry Debtors" to "Customers") does not change where it goes. Sub-groups that users create go wherever their parent goes.

Balance Sheet¶

Schedule III line	Default groups	Notes
Shareholders' funds: Share capital	Capital Account (except Reserves & Surplus)
Reserves and surplus	Reserves & Surplus, plus the surplus in the Statement of Profit and Loss	The surplus is shown in two parts: brought forward, which is accumulated profit up to the start of the financial year (1 April), and profit for the year.
Money received against share warrants	none	Can only be filled by a mapping
Share application money pending allotment	none	Can only be filled by a mapping
Non-current liabilities: Long-term borrowings	Loans (Liability), Secured Loans, Unsecured Loans	Assumption: all loans are long-term. See "What you must classify"
Deferred tax liabilities (net), Other long-term liabilities, Long-term provisions	none	Can only be filled by a mapping
Current liabilities: Short-term borrowings	Bank OD A/c, Bank OCC A/c
Trade payables	Sundry Creditors	Split on the face into (A) MSME and (B) others, using the MSME marks
Other current liabilities	Current Liabilities (its own ledgers), Duties & Taxes, Branch / Divisions, Suspense Account	Assumptions: branch balances settle within the year, and Suspense should be nil (a warning appears when it is not)
Short-term provisions	Provisions
Difference in opening balances	none	Not a Schedule III line. It appears only when opening balances do not tally (same figure as the core Balance Sheet) and comes with a warning
Non-current assets: Property, Plant and Equipment	Fixed Assets	Intangible assets, capital work-in-progress and intangible assets under development can only be filled by a mapping
Non-current investments	Investments	Assumption: all investments are non-current
Deferred tax assets (net), Long-term loans and advances, Other non-current assets	none	Can only be filled by a mapping
Current assets: Current investments	none	Can only be filled by a mapping
Inventories	Closing stock (inventory valuation), plus any Stock-in-Hand ledgers
Trade receivables	Sundry Debtors
Cash and cash equivalents	Cash-in-Hand, Bank Accounts
Short-term loans and advances	Loans & Advances (Asset), Deposits (Asset)	Assumption: these are current
Other current assets	Current Assets (its own ledgers), Misc. Expenses (Asset)	Assumption: Misc. Expenses (Asset) is placed here. It may belong under other non-current assets

Statement of Profit and Loss¶

Schedule III line	Default groups	Notes
Revenue from operations	Sales Accounts, Direct Incomes	Direct incomes are treated as other operating revenue
Other income	Indirect Incomes
Total income
Cost of materials consumed	none	Manufacturers should map their raw-material purchase groups here
Purchases of stock-in-trade	Purchase Accounts	Assumption: a trading business
Changes in inventories of finished goods, work-in-progress and stock-in-trade	Computed as opening stock − closing stock	Groups cannot be mapped to this line
Employee benefits expense, Finance costs, Depreciation and amortisation expense	none	The default groups do not separate these. See below
Other expenses	Direct Expenses, Indirect Expenses
Total expenses; Profit before tax		Assumption: there are no exceptional or extraordinary items, so profit before tax = total income − total expenses
Tax expense: Current tax, Deferred tax	none	Can only be filled by a mapping. Without one, profit for the period is the profit before tax, and a warning says so
Profit (Loss) for the period		Equal to the core Profit & Loss net profit

When no mapping applies¶

A ledger whose group chain reaches no mapped group falls back on its nature: Other current liabilities, Other current assets, Other income or Other expenses. A warning names the group. This cannot happen with today's chart, because every group sits under a default primary group and all of those are mapped. The fallback exists only as a safeguard.

The company's mapping¶

Mapping::of_book reads the stored line codes. For each ledger, KhataOS walks up from the ledger's group. At each group it checks the company's mapping first, then that group's default. The first group with either one wins. This means:

A mapping moves that group's own ledgers, plus those of its sub-groups that have no mapping of their own. A default sub-group (for example Secured Loans under Loans (Liability)) keeps its own default unless it is mapped too.
A mapping must match the side of the statement. A liability group can only map to an equity or liability line, an asset group to an asset line, an income group to an income line, and an expense group to an expense or tax line.
The exception is OCI: either an income or an expense group can map there.
validate refuses a wrong-side code before it is saved.
A stored code that does not fit (for example after a group was moved), cannot be read, or names a deleted group is ignored, with a warning.
Changes in inventories cannot be a target.

Line codes¶

A code is a line, optionally followed by classification tags: <line> or <line>:<tag>,<tag>.

The line part is one of:

a Division I code, such as trade_payables or long_term_borrowings. These are LineItems in snake_case.
a Division II-only code. These are listed below.

The tags each apply only to certain lines:

Tag	Allowed on	Effect
`current_maturities`	Short-term borrowings	Current maturities of long-term borrowings, shown apart in the note. Move the current portion into a group with this mapping, using a journal.
`secured` / `unsecured`	Borrowings, trade receivables	Secured or unsecured classification
`msme`	Trade payables	Dues to micro and small enterprises, for a whole group
`disputed`	Trade payables and receivables	The disputed rows of the ageing schedules
`doubtful`	Trade receivables	Considered doubtful. Division II shows it as credit impaired.

Instead of grouping MSME suppliers, you can mark them one by one. The marks are stored as msme_parties, a list of ledgers in the profile. This adds nothing to the core Ledger. Each party is marked in the mapping screen.

Division II-only codes:

investment_property, goodwill
trade_receivables_non_current, other_financial_assets_non_current, other_financial_assets_current, other_bank_balances, current_tax_assets
lease_liabilities_non_current, lease_liabilities_current, trade_payables_non_current, other_financial_liabilities_non_current, other_financial_liabilities_current, current_tax_liabilities
oci_not_reclassified, oci_reclassified

Each one has a Division I fallback (IndAsLine::division1), so a Division I company can use them too:

long-term trade receivables and payables go to other non-current assets and other long-term liabilities;
lease liabilities go to long-term borrowings, and the current part to other current liabilities [UNCERTAIN];
current tax assets go to short-term loans and advances [UNCERTAIN];
OCI goes to other income or other expenses.

Division II layout¶

Every placement carries both a Division I line and a Division II line. The Division II line is the translation of the Division I line, unless the group has a Division II code. Translations:

Division I	Division II
Share capital	Equity share capital
Reserves and surplus, share warrants, share application money	Other equity
Borrowings	Financial liabilities: borrowings
Trade payables	Financial liabilities: trade payables
Investments, trade receivables, loans and advances	The financial-asset lines

One default group differs from its translation: Deposits (Asset) become other financial assets.

So Division II totals equal Division I totals, and the tests check it:

The Balance Sheet starts with ASSETS.
The Statement of Profit and Loss adds "Profit/(loss) before exceptional items and tax".
An Other Comprehensive Income section shows parts A and B. They are nil unless mapped, and are shown net of their tax.
Total comprehensive income is the Division I profit for the period.

A warning reminds Ind AS companies to move payables that are financial liabilities into other_financial_liabilities_*.

Rounding¶

The unit is chosen in the mapping screen and stored as schedule3_rounding. The choices are rupees, hundreds, thousands, lakhs, millions or crores, and figures show to two decimals in the unit.

Schedule III makes rounding compulsory.
Total income under ₹100 crore: hundreds, thousands, lakhs or millions.
Total income of ₹100 crore or more: lakhs, millions or crores.
Exact rupees are not a permitted unit. They stay the default for working papers, with a warning until you choose a permitted unit.
Each figure is rounded on its own, so a rounded total can differ by a rounding difference from the sum of its rounded lines.

Notes to accounts¶

The notes are numbered as on the statements. The Balance Sheet's lines come first, and the Statement of Profit and Loss carries on from the Balance Sheet's last number. Each note is built from its line's own ledgers and computed figures, so its total equals the line. The tests check this for every note.

Note	Content	From
Share capital	Ledgers; an empty promoter shareholding table; the particulars to supply (classes, par value, reconciliation, holders over 5%)	Capital Account ledgers
Reserves and surplus (Other equity)	Each ledger's opening, additions, deductions and closing; the surplus brought forward, profit for the year and closing	Vouchers in each financial year
Long-term / short-term borrowings	Current maturities; secured; unsecured; not classified (with a warning); remarks for terms, security and defaults	Tags; Secured Loans / Unsecured Loans; Bank OCC treated as secured [UNCERTAIN]
Trade payables	(A) MSME, (B) others; ageing for both dates (not due, < 1, 1–2, 2–3, > 3 years) with rows MSME / Others / Disputed MSME / Disputed others; remarks for the MSMED Act s.22 interest	Bill-wise outstanding
Trade receivables	Secured good / unsecured good / doubtful; ageing for both dates (not due, < 6 months, 6–12 months, 1–2, 2–3, > 3 years) with the four Division I or six Division II rows	Bill-wise outstanding
PPE and intangibles	For each year: opening, additions, disposals, depreciation and closing per ledger; remarks for title deeds and revaluation	Vouchers on the asset ledgers
CWIP and intangibles under development	Ledgers, plus the ageing (projects in progress) for both dates	Debits, oldest used up first
Inventories	Closing stock by top-level stock group, plus Stock-in-Hand ledgers	Stock valuation
Cash and cash equivalents	Cash on hand; balances with banks	Cash-in-Hand vs other ledgers
Changes in inventories	Opening, less closing, (increase)/decrease	Stock valuation
Every other line	Its ledgers
Ratios	The eleven ratios, current and previous, with % variance and "explain" over 25%	The Division I statements (see the research page for the formulas)
Additional regulatory information	Checklist of the disclosures the books cannot give: title deeds, revaluation, loans to promoters, benami property, quarterly returns, wilful defaulter, struck-off companies, charges, layers, schemes, use of borrowed funds, undisclosed income, CSR, crypto

How the notes compute¶

Bills and ageing:

The bill-wise outstanding is built as the core's outstanding-bills report builds it, but for any ledger on the line.
Each unallocated entry is kept on its own date. Whatever the bills do not explain is added as of the balance-sheet date, so the ageing always ties.
Items age from the due date, or from the bill date when there is none. Opening balances age from the start of the books (the financial year of the first voucher).
Credit items, such as advances, net within their age band.

Depreciation:

A credit to an asset in a voucher that debits a depreciation ledger counts as depreciation. Other credits are disposals.
A depreciation ledger is one under a group mapped to depreciation_and_amortisation, or an expense ledger whose name contains "depreciation" or "amortis".
A warning flags a depreciation-looking ledger that is not mapped there.

Not built:

Accumulated depreciation kept outside the books.
The CWIP completion schedule.
The title-deeds, struck-off-company and loans-to-promoters tables. They are listed as to be supplied.

What you must classify¶

These items cannot be worked out from the default groups. The statements show a warning for each one that has a balance.

Current vs non-current. By default, loans are long-term borrowings, investments are non-current, and loans, advances and deposits given are current. Current maturities of long-term borrowings belong under short-term borrowings (2021 amendment). Put them in their own group and map it to short_term_borrowings:current_maturities. The warning goes away once any group carries the tag.
MSME trade payables. Mark MSME suppliers in the mapping screen, or group them under a group mapped to trade_payables:msme. Until one is marked, a warning says that all dues are shown as dues to others.
Employee benefits expense, such as salaries, wages, PF/ESI contributions and staff welfare.
Finance costs, such as interest and other borrowing costs.
Depreciation and amortisation expense.
Tax expense: current tax and deferred tax, plus deferred tax assets and liabilities on the Balance Sheet.
Intangible assets and capital work-in-progress, if you hold them under Fixed Assets.
Cost of materials consumed vs purchases of stock-in-trade, for manufacturers. Note that closing stock is not split between raw materials and finished goods. All of it goes to changes in inventories.

For items 3 to 6, create sub-groups (for example "Salaries & Wages" under Indirect Expenses) and map each one to its line.

Tying out¶

The statements are built from the same balances, closing-stock valuation, accumulated profit and opening difference as the core reports. The tests in schedule3.rs check that:

Total equity and liabilities equals the core Balance Sheet's total liabilities, and total assets equals its total assets, for both periods.
Equity and liabilities equals assets.
Profit (Loss) for the period equals the core Profit & Loss net profit, for both periods, including with mappings in place and with stock.
Division II totals equal Division I totals. Division II total comprehensive income equals Division I profit, and its OCI is taken out of profit for the period (schedule3_notes.rs tests).
Every note's total equals its statement line, for both years. The ageing totals equal the line, for both dates.
The mapping, MSME parties, division and rounding survive replay of the audit trail. They give identical statements (core and pack tests).

Drill-down and numbering¶

Each line carries its figure, the previous figure, its sources (groups, closing or opening stock, surplus brought forward, profit for the year) and the ledgers behind it.

When you press Enter on a line:

If the line is exactly one group's whole subtree, the Group Summary opens.
If the line is made only of stock figures, the Stock Summary opens.
Otherwise, a list of the line's ledgers opens. Enter on a ledger opens its ledger statement.

Note numbers are the order of the lines shown. The Balance Sheet runs 1, 2, 3…, and the Statement of Profit and Loss carries on from the Balance Sheet's last note as at its end date. Lines that are nil in both periods are left out. In Division II, the OCI lines are always shown, but get a note number only when they are not nil. The Balance Sheet always shows Share capital and Reserves and surplus, and the Statement of Profit and Loss always shows Revenue from operations.

Gaps¶

Unbilled dues (receivables and payables) are not tracked. A remark asks for them.
Information outside the books is not captured: share particulars, promoter shareholding, security and repayment terms, MSMED Act interest, and the additional regulatory information. Each is listed in its note as to be supplied.
Exceptional and extraordinary items, discontinued operations and EPS are not built. Division II also lacks biological assets and the Statement of Changes in Equity.
Division III (NBFC) is not supported, and neither is the simplified format for proprietorships and partnerships.
Return on investment is not computed.
It needs market values and the timing of cash flows.
Credit sales and purchases are not separated from cash ones, so the turnover ratios use all sales and purchases.
Excel export for the CA is the generic table CSV of each screen.
Menus: all four screens are in Go To (Alt+G) and the Report Directory under "Statutory": Balance Sheet (Schedule III), Statement of Profit and Loss (Schedule III), Notes to Accounts (Schedule III) and Schedule III mapping.