The New Format of Balance Sheet | Finance for Non-Accountants

Let’s learn the new format of balance sheet of finance for non-accountants by your very own Finance Guru, Vishal Thakkar. Get the most out of it!!!

Ladies and gentlemen boys and girls welcome back to finance tube my name is vishal tucker i am your friend and finance guru back again with an interesting video on india’s video series today we will talk about the new format of balance sheet prescribed by india sorai far s or the new companies act 2013 yes why i am mentioning three sources because all the three

Sources are more or less talking about the same thing the balance shield which we earlier are familiar with which is prescribed by schedule 6 of companies act 1956 had to pick a liability and asset side where we started with share capital reserves and surplus secured low and unsecured loan current liabilities on the asset side we had fixed assets gross block

Depreciate accumulated depreciation net block investments current assets loans and advances and miscellaneous expense to the extent not written off we are all familiar with this format now let us migrate to a new format the new format of balance sheet has become very very interesting and exciting what are the changes the changes can be summarized in one single

Word the new set of rules tells us that if there is one single question that a balance sheet should answer on the face of it it has to be how much money does this company have in its own pocket yes ladies and gentlemen i am talking about liquidity wild banks have always been traditionally following the liquidity format of balance sheet whereby they are writing the


Most liquid assets first and then they go to less liquid less liquid and the least liquid i am not talking about that format per se now the new balance sheet format classifies the assets and liabilities – non current and current assets and non current and current liabilities idea here is that any reader of the balance sheet should be able to find out what is the

Liquidity position of the business why such a format has been evolved in the wake of large to very large scams that have happened in last 10 years globally which have rocked and shocked the world have forced the law enforcers and regulators to come up with a format whereby if there is any siphoning of money intentionally or otherwise done by the management all the

Insiders of the organization it should be clearly and easily visible to all the stakeholders of the enterprise to do that the format has now been shifted to non current assets investments current assets loans and advances on the liability side you have equity other components of equity non current liabilities and current liabilities what is equity what are other

Components of equity what is statement of changes in equity is a new statement altogether which has been introduced in this new format of financial statements much more about this and more on in des will continue in our subsequent videos requesting you to subscribe now to our channel if you have not done so our channel financed you will talk about four things today

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Point number one the banking limit itself point number two the interest rate point number three the security cover and point number four bank charges you

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The New Format of Balance Sheet | Finance for Non-Accountants By Finance Tube

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