Once, when browsing the internet—in the aim of getting various example of balance sheet formats, I was surprised by a website (eghh I forgot the name since it was long time ago) that presented an example of balance sheet format and claimed the form as a standardized balance sheet format. So, is there standardized vs non-standardized balance sheet format?
The truth is NO, there is none, as far as I know. Please let me know if you ever found one. Balance sheet format has never been specified by any accounting bodies. Instead, formats and titles have developed as a matter of tradition and, through industry practice.
Two basic formats, by tradition, are used: (1) The balanced format, in which the sum of the amounts for liabilities and equity are added together on the face of the statement to illustrate that assets equal liabilities plus equity; and (2) The less frequently presented equity format, which shows totals for assets, liabilities, and equity but no sums illustrating that assets less liabilities equals equity. Those two formats can take one of two forms: (1) The account form, presenting assets on the left-hand side of the page and liabilities and equity on the right-hand side; and (2) The report form, which is a top-to-bottom or running presentation. Through this post I will show you two styles of balance sheet format which, for sure, are not based on any accounting standard. Instead, they are based on the industry practice tradition. Read on…
It still about industry-practice balance sheet format (not standard); the three elements customarily displayed in the heading of a balance sheet are:
- The legal name of the enterprise whose financial position is being presented
- The title of the statement (e.g., balance sheet or statement of financial position)
- The date of the statement (or statements, if multiple dates are presented for comparative purposes)
The enterprise’s legal name appears in the heading exactly as specified in the document that created it (e.g. Lie Dharma Putra Corp. instead of the Accounting-Financial-Tax.com which is its brand name).
The use of the titles “balance sheet,” “statement of financial position,” or “statement of financial condition” infer that the statement is presented using generally accepted accounting principles. If, instead, some other comprehensive basis of accounting, such as income tax basis or cash basis is used, the financial statement title must be revised to reflect this variation.
The last day of the fiscal period is used as the statement date. Usually, this is a month-end date unless the enterprise uses a fiscal reporting period always ending on a particular day of the week such as Friday or Sunday.
Balance sheets generally are uniform in appearance from one period to the next with consistently followed form, terminology, captions, and patterns of combining insignificant items. If changes in the manner of presentation are made when comparative statements are presented, the prior year’s information is to be restated to conform to the current year’s presentation.
Example of Balance Sheet Format with Item Classification and Presentation
Regulators do not mandate the use of certain format of balance sheet. Consequently, the classification and presentation of information in a balance sheet may be highly aggregated, highly detailed, or anywhere in between.
In general, highly aggregated balance sheets are used in annual reports and other presentations provided to the public. The additional details required by generally accepted accounting principles are found in the notes to the financial statements. Here is an example of highly aggregated balance sheet that usually provided to the public:
Highly detailed balance sheets are used internally by management. The following comprehensive balance sheet includes more line items (for details about specific assets and liabilities) than are found in most balance sheets: