In this article, we will go through the format of the balance sheet of a company recommend under the company act, 2013. it is essential for companies and useful for commerce and management students.

What is the balance sheet

A balance sheet is a financial statement that communicates the so-called” book value” of an organization, as calculated by subtracting all of the company`s liabilities and shareholders’ equity from its total assets.

 A balance sheet offers internal and external analysts a snapshot of how a company is currently performing, how it performed in the past , and how it expects to perform in the immediate future. This makes balance sheets an essential tool for individual and institutional investors, as well as key stakeholders within an organization and any outside regulators.

Most balance sheets are arranged according to this equation;

Assets= Liabilities+Shareholders`Equity

 

The equation includes three broad categories:

  1. Assets:an asset is anything a company owns which holds some amount of quantifiable value, meaning that it can be liquidated and turned to cash. They are the goods and resources owned by the company. Assets can be further broken down into current assets and non-current assets.

 

2.Liabilities: a liability is anything a company or organization owes to a debtor. This may refer to payroll expenses, rent and utility payments, money owed to suppliers, taxes, or bonds payable. Liabilities can be classified as current liabilities and non-current liabilities.

 

3.Shareholders equity: </b></strong>shareholders' equity refers to the net worth of a company, reflects the amount of money that would be left over if all assets were sold and liabilities paid. Shareholders equity belongs to the shareholders, whether they be private or public owners.

Shareholder`s equity=Assets-Liabilities

 

Format of Balance Sheet

The format of balance sheet of a company is prescribed in part I of Schedule III of the companies act,2013 as follows;

NAME OF THE COMPANY……..

BALANCE SHEET

AS AT…….

PARTICULARS NOTE NO FIGURES AS THE END OF CURRENT REPORTING PERIOD FIGURES AS AT THE END OF PREVIOUS REPORTING PERIOD
I. EQUITY AND LIABILITIES

1. SHAREHOLDERS FUNDS

a) Share capital

b) Reserves and surplus

c) Money received against share warrants

2. SHARE APPLICATION MONEY PENDING ALLOTMENT

3. NON CURRENT LIABILITIES;

a) Long term borrowings

b) Deferred tax liabilities(net)

c) Other long term liabilities

d) Long term provisions

4. CURRENT LIABILITIES;

a) Short term borrowings

b) Trade payables

c) Other current liabilities

d) Short term provisions

Total
II .ASSETS

1. NON CURRENT ASSETS;

a) Fixed assets

I. Tangible assets

II. Intangible assets

III. Capital work in progress

IV. Intangible assets under development

b)  non current investments

c) Deferred tax assets{net)

d) Long term loans and advances

e) Other non current assets

2. CURRENT ASSETS:

a) Current investments

b) Inventories

c) Trade receivables

d) Cash and cash equivalents

e) Short term loans and advances

f) Other current Assets

TOTAL

 

A company`s balance sheet is one of the most important financial statements it will produce typically on a quarterly or even monthly basis(depending on the frequency of reporting).

                                                                                                                                                                                                                                                     

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