Definition of Turn over under sec.2(91) of Companies Act,2013

[SUDHIER KUMAR GUPTHA]

Dear All,

 

Under sec.2(91) of Companies Act,2013 the term "Turn Over” means the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year;

 

This term “turnover” has been used in the following sections:

 

1)76 - Acceptance of deposits from public by certain companies

 

2)92 - Annual return

 

3) 135- Corporate Social Responsibility

 

4)136- Right of member to copies of audited financial statement.

 

5) 148 -Central Government to specify audit of items of cost in respect of certain companies.

 

6) 149 -Company to have Board of Directors.

 

7) Schedule III -General Instructions For Preparation Of Balance Sheet And Statement Of Profit And Loss Of A Company

 

According to me, in order to implement the above said sections and with regard to turnover, invariably the said definition has to be considered.

According to me ,value of the realisation of amount  means that part of turn over which has been realized in cash, but in all the financial statements where in income from operations and other income are recognized on Accrual Basis so far (which includes enchased/unrealized amounts from sales/supplies etc..)

 In order to arrive at the actual “turn over”(sec.2(91)from the financial statements(made on accrual basis),will It  be appropriate to consider the amount of difference between  the income shown under profit and loss account/statement of profit and loss  and  the amount of receivables in the balance sheet(s)?? or any other process needs to be adopted for arriving at 2(91) turn over??