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Schedule III prescribes that line items, sub-line items and sub-totals MAY be presented as ADDITION or SUBSTITUTION on the face of the balance sheet / P&L when:
AOnly when the company has multiple business segments
BOnly when the auditor recommends additional line items
CSuch presentation is relevant to understanding the company's financial position/performance, OR to cater to industry/sector-specific disclosures, OR for compliance with Companies Act amendments or Standards
DThe company's CFO judges it useful, with no other criteria
Answer & Solution
Correct answer: C. Such presentation is relevant to understanding the company's financial position/performance, OR to cater to industry/sector-specific disclosures, OR for compliance with Companies Act amendments or Standards
Schedule III permits — but does not mandate — additional/substitute line items on the face of the financial statements when they serve specific purposes: relevance to financial position/performance, industry/sector disclosure needs, or compliance with amendments to the Companies Act or notified Standards. The flexibility is for serving users' understanding, not for cosmetic presentation.
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