Every balance sheet basically contains these parts: share
capital, reserve and surplus, current & non-current assets and liabilities,
borrowings, etc.
1.
Share capital
Balance sheets must state disclosures
relating to share capital in notes to accounts. Further, they must contain the
following modifications and additions:
·
All rights, preference and restrictions associated
with each class of share have to be specified.
·
Specific disclosures pertaining to the identity
of certain shareholders.
·
Details regarding the number of shares issued,
subscribed, paid, reserved and bought back.
2.
Reserve and surplus
The balance sheet must classify reserves
and surplus funds in the following manner:
a.
Capital reserve
b.
Capital redemption reserve
c.
Debenture redemption reserve
d.
Securities premium reserve
e.
Surplus funds
3.
Current & non-current assets
Every balance sheet has to classify
assets in categories of current and non-current. A current item has typical
features like these: it is used for less than 12 months, it is mainly held for
trading, etc. This distinction is important because it helps make the details
of assets more comprehensive.
4.
Borrowings
Similar to assets, borrowings and
liabilities can also be current or non-current. Loans are debts that have a
repayment period of more than 12 months are non-current borrowings. For
example, large bank loans are generally non-current in nature. On the contrary,
those with shorter repayment periods are current liabilities.
5.
Investments
Even investments come under categories of
current and non-current. Investments which can be realised within 12 months are
current investments, while others are non-current. Every balance sheet must
reflect the business’s investments in this format.
Apart from these basic contents, a typical
balance sheet also contains some other information. This includes trade
receivables, trade payables, cash and cash equivalent, inventories, etc.
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