lecture_12-_balance_sheet0_1_

lecture_12-_balance_sheet0_1_ - MA826 12- The Balance Sheet...

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MA826 12- The Balance Sheet A Balance sheet is a “snapshot” of a company’s financial position at a particular point of time. It is essentially two lists Everything the business owns Where all the money came from (or in proper terminology the sources of finance used to fund these acquisitions. The total amounts on both lists should be the
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Some terminology All things owned are “Assets” Finance can be provided by the owners of the business, “Capital” or third parties, “liabilities” Hence the balance sheet equation can be expressed as Assets = Capital + Liabilities
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Transition from UK to IASB Terminology Net current assets = Current assets – (working capital) Current Liabilities Fixed Assets = Non Current Assets Stocks = Inventories Debtors = Trade Receivables Creditors = Trade Payables Shareholders’ Funds = Equity = Retained Earnings. Share Premium account = now part of other reserves
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Balance sheets are commonly written in a variety of slightly different formats. Assets = Capital + Liabilities Assets – Liabilities = Capital Non Current Assets + Net Current Assets = Capital + Long Term Liabilities.
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Balance Sheet Format Assets Non Current Assets Property, Plant & Equipment X Intangible Assets X X Current Assets Inventories X Trade Receivables X Other current assets X Cash X X = Total Assets (#) X
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Equity and Liabilities Equity Share Capital X Other Reserves X Retained Earnings X Total Equity X Non Current Liabilities Long term borrowings X Long term provisions X Total Non current Liabilities X Current Liabilities X Short term borrowings X Current portion of long term borrowings X Current tax payable X Short term Provisions X Total Current Liabilities X = (#) X Note the two figures labelled # should be the same
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What it all means A) Non Current Assets Things with long lives which are bought to be
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This note was uploaded on 06/07/2011 for the course MA 826 taught by Professor Loba,millet during the Spring '11 term at Kent Uni..

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lecture_12-_balance_sheet0_1_ - MA826 12- The Balance Sheet...

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