Balance sheet- Importance, Sample Format, Requirements
What is a Balance Sheet
Balance sheet is a main report in the business. It provides financial condition on the Balance Date. It provides assets and liabilities details. Balance Sheet contain three major part bashed on
Assets= Equity+ liability
Assets= This is a assets resource created by entity.
Equity= This is amount invested by member/ owner
Liabilities= This is debts amount need to be paid by entity.
What is the balance sheet format?
In the financial accounting , a balance sheet is a summary of the financial balances of an individual or organization ,whether it be a sole proprietorship ,a business partnership , a corporation ,private. According to Company Act 2013 an entity can prepare annual balance sheet as per prescribed schedule . Balance sheet should can be prepare in excel.
Financial statement includes Balance Sheet and Profit & loss account. Balance sheet format may in vertical or horizontal. There may be provisional balance sheet for a individual, society, trust, llp, company, private limited company or other organization such as government or not-for -profit entity .
Sample format of Balance sheet
Importance of Balance sheet
Balance Sheet is a company performance report. The balance sheet provides a picture of the financial health of a business at a given moment in time usually the end of a month or financial year. It can tell you if you owe more money that what you currently have, the current value of your assets and the overall values of your business.
- It is necessary document need to file annually with Ministry of company affair.
- It is a document for comparison of company growth in different period of time.
- It is presented before financial institution for take a credit or loan from bank.
- It is presented in MCA and Income Tax Department for tax calculation.
- It is document for member or stake holder/ share holder to invest money in a company.
- It is also need in Goods and Service Tax assessment.
- It is also need to file Income Tax Return for relevant assessment year.
MCA compliance requirement
As a part of annual e-filling , companies incorporated under the Companies Act 2013 need to file Audited Balance sheet and Profit & loss account according to prescribed New schedule III . A company required to e file the following documents with the registrar of companies (ROC) compliance certificate
- Balance Sheet
- Profit & loss account
- Board report