The ICAI’s guidance note on Financial Statements of Non-Corporate Entities will apply to those financial statements covering periods 1st April 2024 onwards. 

The Institute of Chartered Accountants of India (ICAI) has updated the format for financial statements of non-corporate entities. This update aims to standardize financial reporting for entities like proprietorships, partnerships, HUFs, trusts, and societies. The revised format, detailed in a Guidance Note, includes a standardized vertical format, updated terminology, and mandatory comparative figures and notes. 

Here's a breakdown of the key changes and their implications: 

1. Standardized Format: The new format introduces a structured, vertical presentation for financial statements, promoting consistency and comparability across different non-corporate entities. Entities are categorized into four levels (Level I to IV) based on size and turnover, with different compliance requirements. Large entities (Level I) must adhere to all aspects of the Guidance Note, while MSMEs (Levels II-IV) may have certain exemptions. 
2. Enhanced Disclosures: The updated format requires detailed disclosures, including related party transactions, contingent liabilities, and donor-wise receipts for trusts. This aims to improve transparency and provide stakeholders with a more comprehensive view of the entity's financial position.
3. Applicability and Exemptions: The Guidance Note applies to all non-corporate entities, excluding LLPs and those governed by other prescribed formats. MSMEs may have exemptions from certain accounting standards and disclosure requirements. 
4. Key Considerations for Professionals: Practicing Chartered Accountants need to familiarize themselves with the new format and ensure compliance. Thorough understanding of the classification criteria and disclosure requirements is crucial for accurate reporting. Non-compliance with the updated format may have professional consequences. 
5. Benefits of the Update: Increased Transparency: Standardized formats and enhanced disclosures improve the transparency and reliability of financial information. 

Improved Comparability: 

The uniform structure allows for easier comparison of financial statements across different entities.

 Enhanced Stakeholder Confidence: 

Increased transparency and reliability can boost stakeholder confidence in the financial reporting of non-corporate entities.

 The objective is to ensure the standard formatting of financials, promote transparency, and allow comparability of statements. All such qualified professionals providing financial services to sole proprietors, HUF, partnership firms, associations, societies, trusts, and statutory corporations must apply this guidance note while preparing the balance sheet, profit and loss statement, cash flow statement, etc. LLPs (Limited Liability Partnership) are excluded as these are considered corporate entities.