classified balance sheet

Examples of classified balance sheet in the following topics:

• Introduction to the Balance Sheet

  • The balance sheet is a summary of the financial balances of a company and reflects the company's solvency and financial position.
  • A classified balance sheet has the same three major categories of assets, liabilities, and stockholder's equity, but it breaks those categories down further to give a better idea of the profitability and strength of the company.
  • Both internal and external users use the balance sheet.
  • The balance sheet also demonstrates how liquid the business is.
  • Name the two types of balance sheets and identify which accounts are listed on the balance sheet

• Reporting Long-Term Liabilities

  • Debts that become due more than one year into the future are reported as long-term liabilities on the balance sheet.
  • "Notes Payable" and "Bonds Payable" are also examples of long-term liabilities, and they often introduce an interesting distinction between current liabilities and long-term liabilities presented on a classified balance sheet.
  • On Company X's 12/31/12 balance sheet, a long-term liability for 100,000 would be reported, but what about the balance sheet as of 12/31/13?
  • Continuing one year forward, Company X would report a current liability of 20,000 and a long-term liability of 60,000 on its balance sheet as of 12/31/2014.
  • See below for the balance sheet reporting treatment of the current and long-term liability portions of the Note Payable from initiation to final payment.

• Classifying Receivables

  • Receivables can be classified as accounts receivables, trade debtors, bills receivable, and other receivables.
  • On a company's balance sheet, receivables can be classified as accounts receivables or trade debtors, bills receivable, and other receivables (loans, settlement amounts due for non-current asset sales, rent receivables, term deposits).
  • Accounts receivable therefore can be classified according to their age.

• Being Aware of Off-Balance-Sheet Financing

  • Off-Balance-Sheet-Financing represents rights to use assets or obligations that are not reported on balance sheets to pay liabilities.
  • Off-Balance-Sheet-Financing is associated with debt that is not reported on a company's balance sheet.
  • Furthermore, uncertain assets or liabilities are subject to being classified as "probable", "measurable" and "meaningful".
  • An example of off-balance-sheet financing is an unconsolidated subsidiary.
  • Jeffrey Skilling is the former CEO of Enron, which was notorious for it's use of off-balance-sheet-financing.

• Types of Receivables

  • Receivables can generally be classified as accounts receivables or notes receivable, though there are other types of receivables as well.
  • Receivables can be classified as accounts receivables, notes receivable and other receivables ( loans, settlement amounts due for non-current asset sales, rent receivable, term deposits).
  • Accounts receivable usually appear on balance sheets below short-term investments and above inventory.
  • The maturity date of a note determines whether it is placed with current assets or long-term assets on the balance sheet.
  • If significant, these nontrade receivables are usually listed in separate categories on the balance sheet because each type of nontrade receivable has distinct risk factors and liquidity characteristics.

• Amortized Cost Method

  • Debt held to maturity is shown on the balance sheet at the amortized acquisition cost.
  • Debt held to maturity is shown on the balance sheet at the amortized acquisition cost.
  • In order to record the interim interest revenue and report the investment on the balance sheet, it is necessary to prepare an amortization schedule for the debt.
  • The Z Company's investment in Tee company is shown on the balance sheet as follows:
  • Debt held to maturity is shown on the balance sheet at the amortized acquisition cost.

• Reporting Cash

  • Cash and cash equivalents are reported in the current asset section of a business's balance sheet.
  • Cash is an asset, which means it is included in a business's balance sheet .
  • When the company's cash balance is reported on its balance sheet, all of those accounts are combined into one "cash" line item.
  • A sample balance sheet in Chinese.
  • Cash and cash equivalents are reported on the balance sheet.

• What Goes on the Balances Sheet and What Goes in the Notes

  • The balance sheet lists current liability accounts and their balances; the notes provide explanations for the balances, which are sometimes required.
  • Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a company's calendar year.
  • Balance sheets are presented with assets in one section, and liabilities and equity in the other section, so that the two sections "balance. " The fundamental accounting equation is: assets = liabilities + equity ([).
  • Current liabilities and their account balances as of the date on the balance sheet are presented first, in order by due date.
  • Explain why a company would use a note to the balance sheet

• Redeeming at Maturity

  • Bonds can be classified to coupon bonds and zero coupon bonds.
  • Unless the bond matures in a year or less it is shown on the balance sheet in the long-term liabilities section.
  • All bond discounts and premiums also appear on the balance sheet.
  • On the balance sheet, the Bonds Payable account can be shown as different issues or consolidated into a single balance.
  • Debt securities can be classified as "held-to-maturity," a "trading security," or "available-for-sale. "

• Indefinite-Life Impairment

  • Year end calculations reveal the trademark is valued at $8 million and an impairment loss of $2 million is recorded as a debit to Loss on Trademark Impairment on the income statement and a credit to Accumulated Impairment Losses on the balance sheet (disclosed as a contra asset account to the intangible asset).
  • The carrying amount is defined as the value of the asset as displayed on the balance sheet.
  • Intangibles can also be classified as: legal intangibles or competitive intangibles.
  • When an intangible asset's impairment reverses and value is regained, the increase in value is recorded as a gain on the income statement and reduction to accumulated impairment loss on the balance sheet, up to the amount of impairment loss recorded in prior periods.
  • Increases in value in excess of prior impairment loss is debited directly to the asset and credited to a revaluation reserve account in the equity section of the balance sheet.