The balance sheet of an entity may be presented in a few different formats, including:
Report form
This is the most common format, with assets listed first, then liabilities, and finally equity. The formula for a balance sheet is total assets = total liabilities + total equity.
Account form
This is a horizontal format that lists assets on the right-hand side and liabilities (side by side) on the left-hand side.
The format of a balance sheet for corporate entities in India is typically in an account format, which means it’s divided into two columns.
In Indian accounting standards, assets are on the left side of a balance sheet. The right side of the balance sheet lists a company’s liabilities and shareholders’ equity. The totals of both sides should be equal.
Horizontal Balance Sheet
A horizontal balance sheet is a financial document that shows a company’s assets, liabilities, and equity in a horizontal format. This format is commonly used and helps to organize and present financial information in chronological order.
| BALANCE SHEET | |||||||||||||||||
| Name of the company: | |||||||||||||||||
| Balance sheet as at: | |||||||||||||||||
| Rupees (in crores) | |||||||||||||||||
| Particulars | Figures as at the end of current reporting period | Figures as at the end of previous reporting period | Particulars | Figures as at the end of current reporting period | Figures as at the end of previous reporting period | ||||||||||||
| 1 | 2 | 3 | 4 | 5 | 6 | ||||||||||||
| I. EQUITY AND LIABILITIES | II. ASSETS | ||||||||||||||||
| (1) Shareholder’s funds | – | – | Non-current assets | – | – | ||||||||||||
| (a) Share capital | (1) (a) Fixed assets | – | – | ||||||||||||||
| (b) Reserves and surplus | (i) Tangible assets | ||||||||||||||||
| (c) Money received against share warrants | (ii) Intangible assets | ||||||||||||||||
| (iii) Capital work-in progress | |||||||||||||||||
| (2) Share application money pending allotment | – | – | (iv) Intangible assets under development | ||||||||||||||
| (b) Non-current investments | |||||||||||||||||
| (3) Non-current liabilities | – | – | (c) Deferred tax assets (Net) | ||||||||||||||
| (a) Long-term borrowings | (d) Long-term loans and advances | ||||||||||||||||
| (b) Deferred tax liabilities (Net) | (e) Other non-current assets | ||||||||||||||||
| (c) Other long term liabilities | |||||||||||||||||
| (d) Long-term provisions | (2) Current assets | – | – | ||||||||||||||
| (a) Current investments | |||||||||||||||||
| (4) Current liabilities | – | – | (b) Inventories | ||||||||||||||
| (a) Short-term borrowings | (c) Trade receivables | ||||||||||||||||
| (b) Trade payables | (d) Cash and cash equivalents | ||||||||||||||||
| (c) Other current liabilities | (e) Short-term loans and advances | ||||||||||||||||
| (d) Short-term provisions | (f) Other current assets | ||||||||||||||||
| Total | – | – | Total | – | – | ||||||||||||
VERTICAL BALANCE SHEET
A vertical balance sheet is one in which the balance sheet presentation format is a single column of numbers, beginning with asset line items, followed by liability line items, and ending with shareholders’ equity line items. Within each of these categories, line items are presented in decreasing order of liquidity.
| BALANCE SHEET | ||||||||
| Name of the company: | ||||||||
| Balance sheet as at: | ||||||||
| Rupees (in crores) | ||||||||
| Particulars | Note No. | Figures as at the end of current reporting period | Figures as at the end of previous reporting period | |||||
| 1 | 2 | 3 | 4 | |||||
| I. EQUITY AND LIABILITIES | ||||||||
| (1) Shareholder’s 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 | ||||||||
| Non-current assets | – | – | ||||||
| (1) (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 | – | – | ||||||
Comparative balance sheet:
A corporate balance sheet per Schedule VI of the Companies Act is in a concise format of 7 heads viz. Equity, Long-term liabilities, Current liabilities, contingent liabilities, Current assets, Fixed Assets (Long-term investments in property, plants, and equipment), and intangible assets. In this format, comparing the balance- sheet of a reporting period with previous years tells us the changes in the position of the owner’s investment in the business year by year. It shows how the capital is distributed, and how much investment is identified with various accounts.
Though there is no restriction to prepare a balance sheet ‘as at’ on any date, the Income Tax Act prescribes that all the business concerned must prepare their financial statements as of 31st March of every year.
Information available in the balance sheet by Schedule VI of Companies Act
Part I of the schedule VI to the Companies Act lays down the details of form and contents of the balance sheet. Part II specifies the requirement of a Profit & Loss Account. Schedule VI of the act specifies large numbers of quantity and non-monetary information to be given and the following information are important parts of a financial statement. They are (a) Contingent liabilities and other items, (b)Uncalled liability on partly paid shares,(c) Arrears fixed cumulative dividends, and (d) Estimated amount of contract remaining to be completed and not provided for.
Schedule 12 in the balance sheet -CONTINGENT LIABILITIES will not be added to the total of the assets and liability but will be reflected as a note and it will be for contingent liabilities. So these are the contingent liabilities which need to be shown in the form of foot note or notes to accounts under schedule 12.
Related Posts:
