The balance sheet

The balance sheet

1. The balance sheet 1

   • The balance sheet is a document which has two halves.
     • One half shows a bussiness's assets
       • Bussiness's assets are things owned by the company (factories, machines) that will bring future economic benefits
     • The other half shows the company's liabilities, and its capital or shareholder's equity
       • Liabilities are obligations to pay other organizations or people (money that the company owes, or will nowe at a future date
   • Shareholders' equity
     • Consists of all the money belonging to shareholders
       • Share capital
       • Retainend earnings
   • This doesn't show how much money a company has spent or recieved during a year

2. The balance sheet 2: assets

   • Fixed assets
     • This will continue to be used by the bussiness for a long time
       • investments, such as building and equipment
     • Tangible assets
       • Are asstes with a physical existence
   • Current assets
     • This are things that will probably be used by the bussines in the near future
       • Cash,debtors, stock
     • Intangible assets
       • Include brand names, patents and trade marks
   • Valuation
     • To value stock or inventory, are generally valued at the lower of cost or market, which means whichever figures is lower: their cost

3. The balance sheet 3: liabilities

   • Liabilities are amounts of money that a company owes
     • Long term liabilities
       • Include bonds
     • Current liabilities
       • Include creditors, planned dividends and deferred taxes
   • Accrued expenses
     • These are expenses that have acumulated or built up during the accounting year but will not be paid until the following year, after the date of the balance sheet
   • shareholders' equity on the balance sheet
     • Includes, the original share capital, share premium, retained earnings, reserves

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