Wikipedia of Finance - e-learning course on Accounting Wikipedia Chapter - Learn about Balance Sheet Statement

What is a Balance Sheet? Definition, Format and Example of Balance Sheet


Balance Sheet Definition:

In financial accounting, “Balance sheet is a financial statement summary report of an assets, liabilities and equity capital of an individual or a company or an organization at a specific given time”. This provides adequate information to investors, shareholders or a group about the company’s financial strength at given point of time. This financial report is also known as statement of financial position.

When all the transactions are recorded at the end of accounting year, it reflects the company’s financial position for that accounting year. Investors, readers, or other parties can get information about companies by looking at its balance sheet. This statement presents accurate information about what does company owns and how much company owes to other parties. This data is valuable to bankers as well for processing any credits and loans for the company.

Balance sheet is the mirror image of the below given formula:
Total Assets = Total Liabilities + Owner’s (capital) Equity

An item to be included in Balance Sheet are:

  • Current Assets like Cash and cash equivalents, Investments, Assets, Machinery, Land, Inventories, Buildings, Trade and other receivables, etc.
  • Non-Current Assets like Intangible assets, Patents, Goodwill, Copyrights, etc.
  • Current Liabilities likes Current tax liabilities, Accrued expenses, Current portion of loans payable, Trade and other payables, other financial liabilities, etc.
  • Non-Current Liabilities like deferred tax liabilities, Loans payable, other non-current liabilities.
  • Equity like Capital stock, Retained earnings, Additional paid-in capital.

Balance Sheet Template / Balance Sheet Example:

Balance Sheet of Xyz Corporation India Pvt. Ltd. (Amount in thousands)
 Format of Balance Sheet:

As of Last Year Ending

As of Current Year Ending

Current Assets
Cash and cash equivalents 1,40,000 1,80,000
Inventories 70,000 93,000
Trade receivables 75,000 97,000
Other current assets 13,000 80,000
Total current assets 2,98,000 4,50,000
Non-current assets
Goodwill 45,000 75,000
Property, plant, and equipment 2,80,000 3,50,000
Other intangible assets 77,000 1,05,000
Total non-current assets 4,02,000 5,30,000
Total assets 7,00,000 9,80,000
Current liabilities
Trade and other payables 1,10,000 1,35,000
Current tax payable 26,000 49,000
Current portion of long-term borrowings 12,000 41,000
Short-term borrowings 55,000 1,25,000
Accrued expenses 10,000 38,000
Total current liabilities 2,13,000 3,88,000
Non-current liabilities
Deferred taxes 45,000 70,000
Long-term debt 34,000 56,000
Total non-current liabilities 79,000 1,26,000
Total liabilities 2,92,000 5,14,000
Shareholders’ Equity
Capital 1,55,000 1,85,000
Additional paid-in capital 20,000 64,000
Retained earnings 2,33,000 2,17,000
Total equity 4,08,000 4,66,000
Total  liabilities and equity 7,00,000 9,80,000

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