Schedule III (Part I) – Format of Balance Sheet (Assets)
Introduction
The Asset side is the Second Part of the Vertical Balance Sheet (but we learn it first for classification clarity). Assets are divided broadly into Non-Current and Current.
1. The Format (Asset Side)
| Note No. | Particulars | Figures at end of Current Period | Figures at end of Prev Period |
|---|---|---|---|
| II. | ASSETS | ||
| (1) | Non-Current Assets | ||
| (a) | Property, Plant and Equipment and Intangible Assets | (Amount) | (Amount) |
| (i) Property, Plant and Equipment | (Amount) | (Amount) | |
| (ii) Intangible Assets | (Amount) | (Amount) | |
| (iii) Capital Work-in-Progress | (Amount) | (Amount) | |
| (iv) Intangible Assets under development | (Amount) | (Amount) | |
| (b) | Non-Current Investments | (Amount) | (Amount) |
| (c) | Deferred Tax Assets (Net) | (Amount) | (Amount) |
| (d) | Long-term Loans and Advances | (Amount) | (Amount) |
| (e) | Other Non-Current Assets | (Amount) | (Amount) |
| (2) | Current Assets | ||
| (a) | Current Investments | (Amount) | (Amount) |
| (b) | Inventories | (Amount) | (Amount) |
| (c) | Trade Receivables | (Amount) | (Amount) |
| (d) | Cash and Cash Equivalents | (Amount) | (Amount) |
| (e) | Short-term Loans and Advances | (Amount) | (Amount) |
| (f) | Other Current Assets | (Amount) | (Amount) |
| TOTAL | (Total) | (Total) |
2. Key Classifications
A. Property, Plant and Equipment (PPE)
- Tangible assets like Land, Building, Plant, Machinery, Furniture, Vehicles.
B. Intangible Assets
- Goodwill, Brands, Computer Software, Mining Rights, Copyrights, Patents, Recipes, Licenses.
C. Non-Current Investments
- Investments held for > 12 months. E.g., Investment in Property, Equity Instruments of other entities.
D. Inventories (Current)
- Raw materials, WIP, Finished Goods, Stores & Spares, Loose Tools.
E. Trade Receivables (Current)
- Debtors + Bills Receivable. (Less: Provision for Doubtful Debts).
F. Cash & Cash Equivalents
- Cash in hand, Bank Balance, Cheques on hand.
3. The Operating Cycle Rule
An asset is Current if it satisfies ANY of these criteria:
- Expected to be realized/sold/consumed in the company's Normal Operating Cycle.
- Held primarily for Trading.
- Expected to be realized within 12 months from reporting date.
- It is Cash/Cash Equivalent (unless restricted).
Operating Cycle: Time between acquisition of assets for processing and their realization in Cash. If not identifiable, assume 12 months.
Exam Notes: Writing the Answer
Question: "Where do 'Loose Tools' appear in Balance Sheet?" (2 Marks)
Answer: Loose Tools are shown under the head Current Assets -> Subhead Inventories.
Question: "Where does 'Computer Software' appear?"
Answer: Under Non-Current Assets -> Subhead Property, Plant and Equipment and Intangible Assets -> Intangible Assets.
Summary
- Main Heads: Non-Current Assets, Current Assets.
- Order: Liquidity is NOT the primary order; it's permanence (Non-Current first).
- Inventory: Includes Loose Tools.
Quiz Time! 🎯
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