Balance is the main form of financial statements characterizing the financial and economic activities of the organization. It reflects all funds (by their composition and sources of occurrence at a given date) in cash equivalent. Its structure has the form of a table, on the left side of which assets are presented - the composition of the property and its placement (money, receivables). And on the right side are liabilities, sources of formation of all capital (reserves, accounts payable). Both parts consist of several sections, combining homogeneous groups of funds, each type is called an article and is located separately (in accordance with a specific line). The total amount of items (total) is the balance sheet currency in which the amounts of the asset and liability are the same.
Such equality is explained by the fact that each asset arises due to some action, as a result of which both the means themselves and the sources of their formation are simultaneously reflected in the balance sheet. Thus, the balance sheet currency coincides in two parts due to different points of view on the same objects. In one case, what is money is expressed, and in the other, the one who invested it.
The composition of the asset balance is divided into working capital and non-current assets. In liabilities, current and long-term liabilities are distinguished with a fixed period during which all
tangible assets must be used and the existing debts are repaid. However, assets, like debts, can change their original form. So, a limit can be set on the use of money, and
loan terms extended. All such changes must be provided in the notes.
If the settlement period with creditors and debtors has been increased, the balance sheet may grow. Although this growth also indicates the expansion of the
economic activity of the organization. To find out specific reasons, a financial analysis should be carried out taking into account inflationary processes on existing stocks.
The balance sheet data is required to analyze and evaluate the economic condition of the company (when determining the total amount of obligations to counterparties). Using various factors of stability of the organization, you can see a clear picture of its stability
financially. When calculating many of these indicators, the balance sheet currency is used. The formula for calculating
the autonomy coefficient, for example, has the following form: ( + ) / , where - capital with reserves; RPR -
reserves for future expenses, and WB - balance sheet currency.
In general, this report provides information to managers and all other persons involved in the management of the enterprise about what the company owns, what its stocks are and their relationship with material assets, how they are used and who is responsible for their creation. The balance sheet currency allows you to see the approximate cost of funds that can be obtained during the liquidation of the company. Extraneous institutions, such as the tax office, statistical agencies, creditors, etc. also use this data.