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
|Cash and cash equivalents||1,40,000||1,80,000|
|Other current assets||13,000||80,000|
|Total current assets||2,98,000||4,50,000|
|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|
|LIABILITIES AND EQUITY|
|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|
|Total current liabilities||2,13,000||3,88,000|
|Total non-current liabilities||79,000||1,26,000|
|Additional paid-in capital||20,000||64,000|
|Total liabilities and equity||7,00,000||9,80,000|
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Basics of Accounting for Beginners
- Chapter 1: What is Accounting with Examples
- Chapter 2: Objectives of Accounting
- Chapter 3: Types of Accounts
- Chapter 4: Branches of Accounting
- Chapter 5: Accounting Process
- Chapter 6: What is Assets and Current Assets?
- Chapter 7: What is Liability and Current Liabilities?
- Chapter 8: What is Revenue and Expenses?
- Chapter 9: What is a Single Entry System?
- Chapter 10: What is Double Entry System?
- Chapter 11: What are Journal Entries? Format and Examples
- Chapter 12: What Is a General Ledger? Format with Example
- Chapter 13: What is a Trial Balance? Examples and Limitations
- Chapter 14: What is a Profit and Loss Statement or Income Statement?
- Currently Reading: What is a Balance Sheet? Definition, Format and Examples
- Chapter 16: What is Managerial Accounting? Role, Job and Objectives
- Chapter 17: Accounting Quiz – Basics of Accounting for Beginners Module
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