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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