The balance sheet-financial statement, Financial Accounting

THE BALANCE SHEET

It shows the financial position of the company as at the end of a given financial period. The standard requires that assets and liabilities should be classified between current and non-current portions.

Currently, the standard requires the first part of the balance sheet to show the total assets (i.e. non-current assets + current assets) and the second part of the balance sheet to show equity and liabilities. Equity is the shareholders funds while liabilities are the total of non-current and current liabilities.

Most of the balance sheet items are shown in totals and the breakdown of the figures is given by way of notes to the accounts. E.g. property, plant and equipment which is made up of land, buildings, plant and machinery and motor vehicles is given in the balance sheets at the total net  book values of all there assets and part of the notes to the accounts will explain the make-up  of the assets and movements during the year.

No workings should be given/shown in the balance sheet for most of the items and only the total or the net figures should be presented e.g. accounts receivables should be net of provision for doubtful debts.

IAS 32 requires that redeemable preference shares should be treated as a non-current liability just like any other loan. Therefore, the preference dividends are shown as part of finance costs in the income statement, and other accrued interest and shown as part of current liabilities.

If the company proposes dividends on ordinary and preference share capital before the year end then, this will be provided for in the statements of changes in equity and shown as part of current liabilities in the balance sheet.  However, even the proposed dividends on disclosed after the financial year end, then they will be mentioned only by the way of notes to he accounts and not provided for in the financial statement.

Posted Date: 12/12/2012 12:02:49 AM | Location : United States







Related Discussions:- The balance sheet-financial statement, Assignment Help, Ask Question on The balance sheet-financial statement, Get Answer, Expert's Help, The balance sheet-financial statement Discussions

Write discussion on The balance sheet-financial statement
Your posts are moderated
Related Questions
Financial Accounting An accounting technique that records, interprets, and reports the historical cost transaction of an organization. An organization records these transaction

What are the effects on current income and on future income, if a firm incorrectly capitalizes an expenditure that it should have expensed?   State your answer for both current inc

Swap - Financial contract in which 2 parties agree to exchange net streams of payments over a specified period. Payments are normally determined by applying different indices (for

Content of accounts Periodical accounts should normally consist of:         1.    Balance sheet of the whole trust;         2.    Capital account;         3.    Income account

Asch Experiments In these basics studies by Solomon Asch, groups of seven or 8 people were put in a classroom and shown two cards by the experimenter. The first card had a mai

Focus Company issued a $30,000, 20 year bond with a stated interest rate of 7%. Assume interest payments are made annually. What is the selling price of the bond if the market ra

What is the implications of applying accounting concepts wrongly?

zorn conducted his professional practice through zorn, inc. the corporation uses a fiscal year ending september 30 even though the business purpose test for a fiscal year cannot be

Company A(lessee) will rent inventory for you for 3 years rather than buying it for the regular price of $240,000. Normally these units, which cost us $120,000 to produce, will las

The book of Deven Verma could not be tallied. The accountant transferred the difference of Rs. 1,270 in the suspense account on the debit side. The following mistakes were found la