Balance sheet


A balance sheet summarizes a company's assets, liabilities and shareholders’ equity at a specific point in time (as indicated at the top of the statement). It is one of the fundamental documents that make up a company’s financial statements.

The combination of assets, liabilities and shareholder equity tells investors what the company owns and owes and how much money shareholders have invested in it. The notes to the financial statements explain any assumptions made during the preparation of the balance sheet. Accountants will indicate if the statement has been prepared according to the International Financial Reporting Standards.

More about balance sheets

The balance sheet below for ABC Co. shows the basic equation: assets = liabilities + shareholders’ equity.