# Fortax Financial Statements > Prepare financial statements from a trial balance - Schedule III (Division I for AS, Division II for Ind AS) balance sheet, statement of profit and loss, cash flow statement and notes for companies, and the ICAI format for LLPs, firms and proprietors - with ledger-to-line mapping, a tie-back to the TB, comparatives, ratio disclosures, period-end adjustments and a material-variance list. Also monthly / quarterly MIS P&L against prior period and budget. Typical asks - "balance sheet bana do", "TB se final accounts", "Schedule III me daalo", "notes to accounts ready karo", "monthly MIS P&L", "ratios with reasons". - Skill: `amit-voais/fortax-financial-statements` (Agent Skill, multi-file: 6 files) - Install (CLI): `npx skillmds@latest add amit-voais/fortax-financial-statements` - Raw SKILL.md: https://api.skillmd.com/api/skills/amit-voais/fortax-financial-statements/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Finance & Business - License: Apache-2.0 - Author: amit-voais (https://skillmd.com/u/amit-voais) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/amit-voais/fortax-financial-statements --- # Financial statements Needs Python 3 and internet: runs `scripts/fortax.py` (the Fortax engine on ai.fortax.in; your file is processed and not stored). Build the statements in a workbook where every figure is a formula back to the trial balance. This skill prepares drafts; the CA reviews, the board / partners approve, and the auditor signs. ## Inputs - **Trial balance** for the year (or period) and the previous year — Tally/Busy/Zoho export, .xlsx/.csv, with ledger name, group, opening, debit, credit, closing. - Last year's signed financial statements (comparatives, note structure, accounting policies). - Fixed asset register, ageing of debtors and creditors (with MSME status of suppliers), stock statement, loan statements, share capital register, tax computation, and any known adjustments. - The entity type, which decides the format: | Entity | Format | |---|---| | Company following Accounting Standards (AS) | Schedule III Division I, Companies Act, 2013 | | Company following Ind AS (listed, or net worth Rs 250 crore or more, and their group — Companies (Ind AS) Rules, 2015; confirm) | Schedule III Division II | | NBFC following Ind AS | Schedule III Division III | | LLP, partnership firm, proprietor, trust | ICAI Guidance Note on Financial Statements of Non-Corporate Entities (2022) formats, or as required by the regulator / bank | Formats line by line: [references/schedule-iii-formats.md](references/schedule-iii-formats.md). Thresholds that decide small-company exemptions, Ind AS applicability or rounding change by notification: check with `python3 scripts/fortax.py kb "small company definition paid up capital turnover" --topics mca` and quote the source and date, or mark "confirm on MCA". If no TB is given, ask for it. Paste-in data is fine for an MIS; statutory statements need the TB. ## Step 1 — map every ledger 1. Load the TB into a sheet `TB`. Check it first: total debits = total credits, and opening + debits - credits = closing for each ledger (formulas). A TB that does not tie goes to `fortax-reconciliation`. 2. Sheet `Mapping`: every ledger gets a Schedule III line and a note number. Group names in Tally are a start, not the answer (e.g. `Sundry Creditors` with debit balances are advances to suppliers; `Loans (Liability)` has current maturities of long-term debt). 3. A check cell: sum of mapped closing balances = TB total, and count of unmapped ledgers = 0. **Do not build statements while any ledger is unmapped.** 4. Ledgers whose placement is a judgement (a director's account, an advance of unclear nature, a debit balance in a creditor) are listed for the CA to confirm. ## Step 2 — period-end adjustments Before the statements, list and pass (as proposed entries, via `fortax-journal-entry`): 1. **Accruals:** expenses incurred not booked (audit fee, interest, salary, power). 2. **Deferrals:** prepaid expenses, income received in advance. 3. **Depreciation and amortisation** under Schedule II. 4. **Provision for doubtful debts / expected credit loss** from the ageing and history. 5. **Inventory:** valuation at cost or NRV, whichever is lower (AS 2 / Ind AS 2); write-down of obsolete or slow-moving stock. 6. **Foreign currency:** restate monetary items at the closing rate (AS 11 / Ind AS 21). 7. **Tax:** current tax from the computation; deferred tax (AS 22 / Ind AS 12). 8. **Fair value:** investments and derivatives measured at fair value (Ind AS 109). 9. **Employee benefits:** gratuity and leave (AS 15 / Ind AS 19). 10. **MSME:** interest payable under s.16 MSMED Act on dues beyond 45 days, and its disallowance. Reclassifications (no P&L effect): long-term borrowings due within 12 months to current maturities; netting of allowances and accumulated depreciation; related-party / group eliminations on consolidation; discontinued operations to a separate line; share of associates (equity method) in consolidated statements; debit balances in creditors and credit balances in debtors to the other side. ## Step 3 — build the statements (sheets with formulas off `Mapping`) - **Balance Sheet** and **Statement of Profit and Loss** in the Schedule III order, with the previous year alongside (reclassify comparatives to match and say so in a note). - **Cash Flow Statement** (AS 3 / Ind AS 7), indirect method. Not required for a one person company, a small company or a dormant company (s.2(40) Companies Act) — confirm the entity's status. - **Statement of Changes in Equity** for Ind AS companies. - **Notes**: accounting policies, then one note per line item, and the Schedule III additional disclosures (list in the reference file): promoter shareholding, trade receivable and payable ageing, CWIP ageing, title deeds not in the company's name, the ratios with reasons for change over 25%, MSME dues, related-party transactions, contingent liabilities, CSR, and the rest. - Rounding as Schedule III allows for the turnover band (confirm the band). ## Step 4 — tie-back checks (each a formula cell that must show TRUE / 0) - [ ] Total assets = total equity and liabilities, both years - [ ] Profit for the year in P&L = movement in surplus in reserves (after dividends and transfers) - [ ] Closing cash and bank in the cash flow = balance sheet = bank BRS balances - [ ] Every note total = its line on the face - [ ] Sum of all mapped ledgers = TB; unmapped ledgers = 0 - [ ] Depreciation in P&L = fixed asset note; additions in the note = investing cash flow (after capital creditors) - [ ] Tax expense = current tax + deferred tax; DTA/DTL movement = deferred tax charge - [ ] Previous-year figures = last year's signed statements (or the reclassification is noted) - [ ] Revenue in books vs GST returns (GSTR-1/3B, annual return) — differences explained ## Step 5 — comparison and variances For a management P&L (monthly, quarterly, annual, year-to-date), present current period, comparison period, variance in Rs and %, and budget where available: ``` STATEMENT OF PROFIT AND LOSS — Sharma Traders Pvt Ltd Period: Q2 FY 2026-27 (Rs in lakh) Current Prior Var (Rs) Var (%) Budget Budget var Revenue from operations Sale of products X X X X% X X Sale of services X X X X% X X Other income X X X X% TOTAL INCOME X X X X% X X Cost of materials consumed X X X X% X X Purchases of stock-in-trade X X X X% Changes in inventories X X X X% GROSS MARGIN X X X X% Gross margin % X% X% X pp Employee benefits expense X X X X% X X Other expenses X X X X% X X EBITDA X X X X% Finance costs X X X X% Depreciation and amortisation X X X X% PROFIT BEFORE TAX X X X X% X X Tax expense (current, deferred) X X X X% PROFIT FOR THE PERIOD X X X X% X X Net margin % X% X% X pp ``` Variance: Rs variance = current - comparison; % variance = (current - comparison) / |comparison|; margins and ratios as change in percentage points (or basis points, 1 bp = 0.01%). Materiality, decomposition (volume, price, mix, one-time, timing, exchange), narratives and waterfalls follow `fortax-variance-analysis`. Key metrics block: ``` KEY METRICS Current Prior Change Revenue growth % X% Gross margin % X% X% X pp EBITDA margin % X% X% X pp Net margin % X% X% X pp Employee cost % of revenue X% X% X pp Effective tax rate % X% X% X pp ``` Material variance list: | Line item | Var (Rs) | Var (%) | Favourable / Adverse | Preliminary driver | Action | |---|---|---|---|---|---| For statutory statements, the Schedule III ratio note needs a reason for every ratio that moved more than 25% — take the reason from the ledgers, not a guess; unknown reasons are questions for the client. ## Output Into `//Audit/` (or `Books/`), e.g. `FS_Sharma-Traders_FY2026-27_draft.xlsx` with sheets `TB`, `Mapping`, `Adjustments`, `BS`, `PL`, `CFS`, `Notes`, `Ratios`, `Checks`, plus a short note: 1. The statements with comparatives. 2. Key metrics and the ratio note. 3. Material variances with investigation flags. 4. Proposed adjustments, ledgers whose mapping needs confirmation, and follow-up questions for the client. 5. Any failed check — a blocker, not a footnote. For a client reporting to a foreign parent under US GAAP or IFRS, the presentation rules and reference formats are in [references/us-gaap-ifrs-presentation.md](references/us-gaap-ifrs-presentation.md). ## Credit Workflow, variance method, presentation reference and adjustments adapted from anthropics/knowledge-work-plugins (Apache-2.0). Changed by Fortax: rebuilt around Schedule III, Indian Accounting Standards, TB mapping and tie-back checks; US GAAP material moved to a reference file.