Talk:Balance sheet

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I'm about going crazy sorting BE and AE terms in Financial Statements. Since the Articles only rarely specify what's what I start using s.th and then find out later it's British and American usage is s.th else e.g. Deferred tax credit I was told should be prepaid taxes?

how we calculate gross profit ratios and net profit ratios

• • What? That's on the income statement. - Jerryseinfeld 16:38, 14 Nov 2004 (UTC)

Should there be a discussion about how companies show the depreciation of assets on their balance sheets? For example, look at http://www.bized.ac.uk/stafsup/pizza/jan18.htm As our page reads it suggests that assets remain on the balance sheet at cost without depreciation, which is not true. - dumbledad 11:25, 03 Dec 2004 (GMT)

Contents 1 Depreciation 2 Significant Changes 3 Problems with the Balance Sheet 4 Equity 5 Can i make a balance sheet anytime i want?! 6 Curious example

[edit] Depreciation

Should there be a discussion about how companies show the depreciation of assets on their balance sheets? For example, look at http://www.bized.ac.uk/stafsup/pizza/jan18.htm As our page reads it suggests that assets remain on the balance sheet at cost without depreciation, which is not true. - dumbledad 11:25, 03 Dec 2004 (GMT)

• Sure. what type of discussion? Let me just start by stating a few things.
  Companies or businesses acquire equipment and other items from time to time in order to conduct their business operations. For example, a business that produces hot rolled steel coils needs to buy hydraulic presses to roll hot steel into coils. Such a press may be "expensive". The word expensive here means that the cost of acquiring a press could be too large to be accounted as an "expense" in a single period of operation. Further, the press bought at one point in time provides valuable operational value (i.e. rolls hot steel into coils) for a long period of time (say 15 years) before a new press is to be bought. For these and other reasons such equipment or items (often called capital expense) are not accounted as cost within a short period of time following acquisition. Instead, various different measures are used to calculate depreciation of an asset over it's life. Untill such time as the equipment or item is completely used (becomes un-valuable to the business)or the equipment or items's written down value approaches nil, the remaining cost of the asset is considered as an asset in the balance sheet. costs that are expensed in a financial period are taken as expenses in the income statement for that period. There is a lot more. further thoughts - after you. doles 21:19, 2005 Mar 7 (UTC)

[edit] Significant Changes

I propose to make significant changes to the page, the entire sencond paragraph is problematic, being wrong in some respects and very general. If any stakeholders have an issue with making substantial changes please post them here.

Go ahead! There is this thing: be BOLD. And thank you for taking interest in this article. I hope you'll change it for good. Ps. it wouldn't hurt to register. Renata3 14:26, 17 September 2005 (UTC)

If someone could change/edit this statement on Company Balance Sheets would be very helpful as it may confuse students, or may be weak minded accountants, and cause many harmful problems. If anyone has a true knowledge of this topic, please could you change parts of the text. Thank you...

[edit] Problems with the Balance Sheet

There are some issues with the ordering of the various categories on the balance sheet. For instance, the standard convetion is to have the current assets/liabilities first before the noncurrent/longterm ones. Also, within the different categories, the accounts should be:

For assets, in the level of liquidity. For example, cash and cash equivalents should be first, since it is the most liquid of all current assets, followed by whatever is most liquid after that (or what will be used up quickest, such as investory, followed by receivables).

For liabilities, they should be in the order with which the liability will be paid off, so accounts payable, followed by current portions of debt, etc.

[edit] Equity

The article mentions equity. The disambiguation page has a link to Shareholders' equity. Is this link appropriate or too specific? Hirzel 10:01, 8 April 2006 (UTC)

[edit] Can i make a balance sheet anytime i want?!

i'm a junior accountant i work in a bank my boss came to me and told me to make a balance sheet for a half year ? i tried but i never got them balanced? i told him that balnce sheet cann't be done throught the year! am i right? or not? plz help me

You could have a daily balance sheet if you wanted, the rules of double entry are not affected by the period of time, but don't tell your boss. JMcC 17:36, 14 September 2006 (UTC)

You probably didn't put enough allowances, adjustments, deferred/ prepaid stuff in your balance sheet. That's why it didn't come out right. (Lisa)

All Balance Sheets are dated "as of", meaning that it reports on the assets, liabilities and owner's equity balances for a particular period of time. You can prepare a balance sheet anytime you wish, provided that you have records that shows your beginning balances of the three major components, and that you have the records for any adjustments (prepayments and accruals, among others) that you need to add/deduct from the mentioned major components.

If for instance you have the balance sheet dated July 31, 2006 and your manager/boss or someone else requested that you prepare an updated balance sheet, for instance, as of August 5, 2006, then you need to carefully look at your general journal and other documents where you record transactions affecting items on the balance sheet. Incorporating these transactions in your assets, liabilities or owner's equity will provide you with an updated balance sheet.

Bear in mind that in today's corporate environment, with just a click of a mouse, you can prepare an updated balance sheet or any type of financial statement for that matter. However, if your company is a small one, or even a medium-scale business, the chance is that you might still use manual accounting. But there are now available softwares or programs that you may use to make your accounting system computerized. The only concern here is the applicability of these third-party software to your own system. Modelwatcher 10:30, 21 November 2006 (UTC)

[edit] Curious example

Nice simple example of a balance sheet but it has one slight flaw. The company appears to be trading because it has accounts receivable but has not produced a profit or loss. Of course it might have just broken even, but that isn't very realistic, is it? JMcC 17:36, 14 September 2006 (UTC)