Hello partners, from today we will start to update the relevant content of the financial statements, it may take 15-20 articles to update, if you want complete information, remember to pay attention.
So let's start with the balance sheet today.
1. What is a balance sheet?
Balance sheet: It reports the assets, liabilities and owners' equity owned by the enterprise at a certain point in time, and it is a statement that expresses the financial status of the enterprise. His basic template is as follows:
The basic logic of his compilation is: [left] assets = [right] liabilities + owners' equity.
2. The main components of the balance sheet and their interpretation.
1) Assets: They are divided into current assets and non-current assets.
Liquid Assets:
1] is expected to be realized, ** or consumed during a normal business cycle, or held primarily for trading purposes
2] Assets that are expected to be realized within one year (including one year) from the balance sheet date;
3] Cash or cash equivalents with unrestricted ability to exchange other assets or settle liabilities within one year from the balance sheet date.
Current asset items typically include:
Financial assets at fair value through profit or loss (trading financial assets).
Monetary funds, notes receivable, accounts receivable, prepayments, interest receivables, dividends receivable, other receivables, inventories, non-current assets held for sale or assets held for sale in the disposal group (assets held for sale), non-current assets due within one year and other current assets, etc.
Non-current assets: Refers to assets other than current assets.
Non-current asset items typically include:
Financial assets (debt investments) measured at amortized cost
Financial assets (other debt investments, investments in other equity instruments) measured at fair value through other comprehensive income, long-term receivables, investment real estate, long-term equity investments, fixed assets, construction in progress, construction materials, disposal of fixed assets, intangible assets, development expenditures, long-term amortized expenses, other non-current assets, etc.
2) Liabilities: They are divided into current liabilities and non-current liabilities.
Current liabilities: expected to be liquidated in a normal business cycle;
Held primarily for trading purposes;
It shall be liquidated within one year (including one year) from the balance sheet date;
Enterprises do not have the right to defer the liquidation of liabilities beyond one year after the balance sheet date.
Current liability items typically include:
Short-term borrowings, notes payable, accounts payable, advance receipts, financial liabilities at fair value through profit or loss (trading financial liabilities), employee compensation payable, taxes payable, interest payable, liabilities held for sale in disposal group (held for sale), dividends payable, other payables, non-current liabilities due within one year.
Non-current liabilities: Liabilities other than current liabilities.
Long-term borrowings, projected liabilities, bonds payable, deferred income, long-term payables, deferred tax liabilities, special payables, other non-current liabilities.
3) Owner's equity.
It is the residual equity of the assets of the enterprise after deducting the liabilities, reflecting the total amount of net assets owned by the shareholders (investors) of the enterprise on a specific date.
Generally, it is itemized according to paid-in capital (or share capital), other equity instruments, capital reserve, other comprehensive income, surplus reserve and undistributed profits.
A sample balance sheet is as follows:
That's all for today, and we'll give you an analysis of how the balance sheet is prepared tomorrow. Please stay tuned.