Preparation of balance sheet as per ‘Companies Act’ 2013 under vertical format

12/04/2021 0 By indiafreenotes

The balance sheet of a company summarizes its financial position. It presents an account of where a company has obtained its funds and where it has invested them.

Companies receive funds from two sources; lenders and shareholders. The amount invested by shareholders is called equity and the amount borrowed from lenders is called debt. Debt, combined with the company’s other financial obligations is called liability.

Companies invest their equity and borrowings in assets that help them generate revenue. Thus, a company’s liabilities and equity must equal its assets. This gives you the basic equation that is key to understanding balance sheets:

Assets = Liabilities + Equity

  • The Revised schedule as eliminated the concept of ‘Schedule’ and such information is now to be furnished in the notes to accounts.
  • The revised schedule follows Accounting Standards in case there is any conflict prevails.
  • The revised schedule prescribes the vertical format for presentation of balance sheet.
  • All assets and liabilities classified into current and non-current and presented separately in the balance sheet.
  • The shareholder holding more than 5% shares must be disclosed in the notes to accounts.
  • Any Debit balance in the statement of Profit and Loss will be disclosed under the head “Reserve and Surplus”.
  • Specific disclosures are prescribed for Share Application Money.
  • The term ‘Sundry Debtors’ has been replaced with the term ‘Trade Receivables’.
  • ‘Capital Advances’ are specifically required to be presented separately under the head ‘Loans and Advances.’
  • Tangible assets under lease are required to be separately specified under the head ‘Loans and Advances’.
Name of the Company
Balance Sheet as at……..
  Particulars Note No. Figures at The End Of Current Reporting Period Figures At The End Of Previous Reporting Period
(1) Shareholder’s Funds      
Share Capital      
Reserve and surplus      
Money received against share warrants      
(2) Share application money pending allotment      
(3) Non-current Liabilities      
Long Term borrowings      
Deferred Tax Liabilities (Net)      
Other Long term liabilities      
Long Term provisions      
(4) Current Liabilities      
  Short term borrowings      
  Trade payables      
  Other current liabilities      
  Short term provisions      
(1) Non-Current Assets      
  (a)Fixed assets      
  Tangible assets      
  Intangible Assets      
  Capital work-in-progress      
  Intangible assets under development      
  (b)Non-Current Investments      
  (c)Deferred Tax Assets (net)      
  (d)Long term loans and advances      
  (e)Other non-current assets      
(2) Current Assets      
  Current Investments      
  Trade receivables      
  Cash and cash equivalents      
  Short-term loans and advances      
  Other Current Assets