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Balance sheet and current assets

Balance sheet and current assets - Balance Sheet(overview A...

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Balance Sheet (overview) A balance sheet is a statement of the total assets and liabilities of an organisation at a particular date - usually the last date of an accounting period. The balance sheet is split into two parts: (1) A statement of fixed assets , current assets and the liabilities (sometimes referred to as " Net Assets ") (2) A statement showing how the Net Assets have been financed, for example through share capital and retained profits. The Companies Act requires the balance sheet to be included in the published financial accounts of all limited companies. In reality, all other organisations that need to prepare accounting information for external users (e.g. charities, clubs, partnerships) will also product a balance sheet since it is an important statement of the financial affairs of the organisation. A balance sheet does not necessary "value" a company, since assets and liabilities are shown at "historical cost" and some intangible assets (e.g. brands, quality of management, market leadership) are not included. Example Balance Sheet The structure of a typical balance sheet is illustrated below: Boston Learning Systems plc Balance Sheet at 31 December 2009 2008 £'000 £'000 ASSETS Non-current assets Goodwill and other intangible assets 150 150 Property, plant & equipment 2,450 2,100 2,600 2,250 Current assets Inventories 1,325 1,475 Trade and other receivables 4,030 3,800 Short-term investments 250 190 Cash and cash equivalents 1,340 780 6,945 6,245 Current liabilities Trade and other payables 2,310 2,225 Short-term borrowings 350 550 Current tax liabilities 800 650 Provisions 290 255 3,750 3,680 Net current assets 3,195 2,565
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Non-current liabilities Borrowings 1,200 1,450 Provisions 140 140 1,340 1,590 NET ASSETS 4,455 3,225 EQUITY Share capital 500 500 Retained earnings 3,955 2,725 TOTAL EQUITY 4,455 3,225 An asset is any right or thing that is owned by a business. Assets include land, buildings,
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