Balance Sheet – Meaning & Format

Balance sheet is one of the important financial statements which a joint stock company has to prepare at the end of every financial year. It is a summarized report of assets, liabilities and shareholders’s funds of a company. The balance sheet is used to access the current position of a company.

It is mandatory for every public (limited) company in India to disclose its balance sheet to general public but not for private companies to do so.

A balance sheet has two sides – Liability and asset.

On the left hand side i.e. liability side, a company lists all of its liabilities including share capital, reserve and surplus, secured & unsecured loans and current liabilities & provisions.

On the right hand side i.e. asset side, a company lists all of its assets including fixed assets, investments, current assets, loan & advances and miscellaneous expenditures.

Format of a horizontal balance sheet:


Balance sheet of XYZ Ltd.

As on 31/03/20..


Figure for the current year (Rs.)


Figure for the current year (Rs.)

Share Capital:

Authorized … shares of Rs … each



Less: Calls unpaid

Add: Forfeited shares

Fixed Assets:


Land & Building

Leasehold premises

Railway sidings

Plant and machinery


Patents and trademark

Live stock


Reserve and Surplus:

Capital reserve

Capital redemption reserve

Securities premium

Other reserves

P&L A/c


Government or trust securities, shares, debentures, bonds etc.

Secured Loans:


Loans and advances from banks

Loan and advances from subsidiaries

Other loan and advances

Current Assets, Loans and Advances:

Current Assets:

Cash and bank balance

Accrued interest

Stores and spare parts

Loose tools

Stock in trade


Accounts receivable

Loans and Advances:

Advances and loans to subsidiaries

Bills receivables

Advance payments and unexpired discounts

Unsecured Loans:

Fixed deposits

Loan and advances from subsidiaries

Short term loans and advances

Other loans and advances

Miscellaneous – Expenditure:

Preliminary expenses

Discount on issue of shares

Other deferred expenses

Current Liabilities and Provisions:

Current Liabilities:

Accounts payable

Accrued expenses

Short term notes

Current portion of long term notes


For taxation

For dividends

For contingencies

For PF Schemes

For insurance, pension and other such benefits

P & L A/c (debit balance: If any)
Total   Total  


It should be noted that the “total” of both the sides always remains equal.

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Vikas Sharma is the chief author at Monetary Section. He is an MBA (finance) from GJIMT Mohali. He started his career in 2014 and at the same time he started this website. He is young enthusiast who loves to educate people about finance. To reach out to the people from all territories, he chose internet as a medium.