Disclosure of Summary of the Significant Accounting Policies
Banks should disclose the accounting policies regarding key areas of operations at one place, i.e., under Schedule 17, along with notes to accounts in their financial statements. This may include disclosure, such as, Basis of Accounting, Transactions involving foreign exchange, Investments – classification, valuation, etc, Derivative Transactions, Advances and Provisions thereon, Fixed Assets and Depreciation, Revenue Recognition (including strategic Debt Restructuring), Employee Benefits, Provision for Taxation, etc.
The Form A and B of the Third Schedule contains 16 schedules, which is to be uniformly used by all the banks. In addition to the 16 detailed prescribed schedules, banks are required to furnish the ‘Summary of Significant Accounting Policies’ and ‘Notes to Accounts’ under Schedule 17 and Schedule 18 respectively, to maintain uniformity. This Chapter deals with disclosure requirements in Notes to Accounts as laid down in the above mentioned RBI circular. The disclosures requirement contained in the Master Circular are minimum disclosure requirements. The banks may consider disclosing significant additional information for enhancing the understanding of the users of the financial statements. Further, the disclosures listed herein are intended only to supplement, and not replace, other disclosure requirements under relevant legislation or accounting and financial reporting standards. Where relevant, a bank should comply with such other disclosure requirements as applicable.
The previous year’s comparatives should also be disclosed along with the disclosures for the current year.