Excel Balance Sheet Template is an example prepared under IFRS reporting. While it’s possible to add your own lines to the balance sheet, we would first like to introduce you the terminology and principles of a balance sheet or statement of financial position, either way you would call it.
The balance sheet, being the most important of the four basic statements the company may have for its financial performance, in a nutshell is a summary of financial balances at a certain date (balance sheet does not reflect results for a certain period, but merely the financial position at a certain date). Those financial balances are usually divided between groups of assets (cash, inventory, property, plant and equipment etc), liabilities (accounts payable to suppliers, tax balances, payable to employees, borrowings from banks etc) and equity. In the structure of the balance sheet assets are normally followed by liabilities and then equity. While assets and liabilities represent positions mainly with third parties, equity or net assets is the mathematical difference between those two representing the assets left for owners to ideally distribute as dividends.
Visually comparing assets with liabilities enables you to get a pretty good idea of how the company operates and finances its activities. In case of large amount of borrowings the company is getting its resources from banks, in case of large amount of accounts payable balances the funding is gathered from suppliers (through long payment terms) or in case of significant owners equity the party funding the activities are the owners. The Excel Balance Sheet Template prepared by us involves various types of balances so that you could choose the one applicable for your company.
The balances themselves are measured usually at historical cost or fair value, depending a lot on the type of assets or liability currently being measured. We’ll cover the measurements for each type of balance separately in our future posts.
Into our Excel Balance Sheet Template we have added the most commonly used lines and groups you would normally see in balance sheets prepared under IFRS. Since balance sheets vary from industries and because local GAAP requirements, do also pay attention to the specifics not covered with our Excel Balance Sheet Template.