Balance Sheet

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Balance Sheet :
A balance sheet, in formal bookkeeping and accounting, is a statement of the book
value of a business or other organization or person at a particular date, at the end of a period such as a "fiscal year," as distinct from an income statement, also known as a profit and loss account (P&L), which records revenue and expenses over a specified period of time.
A balance sheet is often described as a "snapshot" of the company's financial condition on a given date.
Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time, instead of a period of time.
A simple business operating entirely in cash could measure its profits by simply withdrawing the entire bank balance at the end of the period, plus any cash in hand.
However, real businesses are not paid immediately; they build up inventories of goods to sell and they acquire buildings and equipment.
In other words: businesses have assets and so they could not, even if they wanted to, immediately turn these into cash at the end of each period.
Real businesses also owe money to suppliers and to tax
authorities, and the proprietors do not withdraw all their original capital and profits at the end of each period. In other words businesses also have liabilities.

A modern balance sheet usually has three parts: assets, liabilities and shareholders' equity.
The main categories of assets are usually listed first and are followed by the liabilities.
The difference between the assets and the liabilities is known as the 'net assets' or the 'net worth' of the company.
The net assets shown by the balance sheet equals the third part of the balance sheet, which is known as the shareholders' equity. This balance is not a coincidence. Records of the values of each account in the balance sheet are maintained using a system of accounting known as double-entry bookkeeping.

Balance Sheet Structure :The following Balance Sheet structure is just an example. It does not show all possible kinds of assets, equity and liabilities, but it shows the most usual ones. Because it shows Goodwill it could be a consolidated balance sheet. Monetary values are not shown, summary (total) rows are missing as well.

Balance Sheet of XYZ, Ltd. as on 31 December 2005
ASSETS
Current Assets
Cash and cash equivalents
Marketable Securities
Accounts receivable
Inventories
Prepaid Expenses
Investments held for trading
Other current assets
Non-Current Assets (Fixed Assets)
Property, plant and equipment
Less : Accumulated Depreciation
Goodwill
Other intangible fixed assets
Investments in associates
Deferred tax assets
LIABILITIES and EQUITY
Current liabilities
Accounts payable
Current income tax liabilities
Current portion of bank loans payable
Short-term provisions
Other current liabilities
Long term Liabilities (Fixed Liabilities)
Bank loans
Issued debt securities
Deferred tax liability
Provisions
Minority interest
Capital and reserves
Share capital
Capital reserves
Revaluation reserve
Translation reserve
Retained earnings