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+--- Thread: 4th or 5th Schedule for ESE? (/showthread.php?tid=8500)
4th or 5th Schedule for ESE? - Nevermore - 08-04-2010
Hi,
Can anyone kindly tell me that whether Economically significant entities (ESE), as defined in 5th Schedule of Companies Ordinance, are required to follow 4th or 5th schedule?
I asked this question because Fourth schedule in its very first section clarifies that it is applicable only on listed companies whereas Fifth schedule is applicable only on medium and small sized entities.
Thanks in advance..
- VITAL - 08-04-2010
Technically speaking ESE is just a term used to distinguish/define MSE.
So a listed company (which also by virtue of definition of ESE is a ESE) is required to comply with requirements 4th schedule and follow IAS/IFRSs (not Accounting and Financial Reporting Standards for Medium-Sized Companies and Small-Sized Companies).
Now you answer that
If small sized company is a listed company
What it will be required to comply with?
- Nevermore - 08-05-2010
Lol bro.. You just increased my confusion.. )
Didn't law making authorities thought about that while making such regulations.. i mean you can not technically stop small sized entities from adopting 5th schedule )
Btw, what is your qualification VITAL?
- VITAL - 08-05-2010
You should read sub-section 2 of section 234 with 4th and 5th schedule and also read notification given as footnote to section 234 in SA Salam book.
1. Listed companies (including their subsidiaries) are required to comply with 4th schedule.
2. Non-listed companies are required to comply with 5th schedule.
3. Listed companies which also meet the criteria of MSE and SSE are required to follow IASs specially prepared for MSE and SSE.
4. Listed companies which do not meet the criteria of MSE and SSE (they are ESE) are required to follow regular IAS/IFRSs.
5. Non listed companies which donât meet the criteria of MSE and SSE are required to follow regular IAS/IFRS.
Examples
If listed company also meets the criteria of ESE then nothing happens. Listed companies required to do what they are required to do, that is, 4th schedule and IAS/IFRSs (case 1 and 4)
If Small size entity is a listed company they are required to comply with 4th schedule and IASs specially prepared for them.
If SSE is unlisted one it is required to comply with 5th schedule and IAS/IFRSs.
- Nevermore - 08-09-2010
what a comprehensive answer )
i just cant get enough of thanking you bro..
btw, u didnt answered about your qualification
- VITAL - 08-09-2010
I am just a CA student like you.
And also smarter than 5th grader.
- perfectionist - 08-26-2010
Our company is a non listed company and satisfies five conditions (a, b, c, d, f) mentioned in fifth schedule under heading 2 (iv) of companies ordinance. I have two questions
(1) Is our company a medium sized entity?
(2) Should we follow Accounting and Financial Reporting Standards for MSEs issued by ICAP?
Your opinion/guidance is most urgently requested.
- VITAL - 08-27-2010
âMedium-Sized Companyâ means a company that
(a) is not a listed company or a subsidiary of a listed company;
(b) has not filed, or is not in the process of filing, its financial
statements with the Securities 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 fiduciary capacity for a broad group of
outsiders, such as a bank, insurance company, securities
broker/dealer, pension fund, mutual fund or investment banking
entity;
(d) is not a public utility or similar company that provides an
essential public service;
(e) is not economically significant on the basis of criteria defined in
clause (iii); and
(f) is not a Small-Sized Company on the basis of criteria defined in
clause (vii).
1A. All Medium-Sized and Small-Sized companies as defined in this Schedule shall
follow the Accounting and Financial Reporting Standards for Medium-Sized Companies
and Small-Sized Companies,