Balance Sheet as per Schedule 3 of the Companies Act 2013

- Introduction to Schedule 3:
Schedule 3 of the Companies Act 2013 provides a format for the preparation of balance sheet for companies in India. It sets out the specific requirements and guidelines for presenting the financial position of a company.

- Components of a Balance Sheet:
A balance sheet consists of assets, liabilities, and shareholders' equity. Assets are what the company owns, liabilities are what it owes, and shareholders' equity represents the owners' stake in the company.

- Format of a Balance Sheet:
The balance sheet is typically divided into two main sections: the assets section on the left-hand side and the liabilities and shareholders' equity section on the right-hand side. The total assets must equal the total liabilities and shareholders' equity.

- Classification of Assets:
Assets are classified as current assets (such as cash, accounts receivable) and non-current assets (such as property, plant, equipment). The assets are listed in order of liquidity, with current assets listed first.

- Classification of Liabilities:
Liabilities are classified as current liabilities (such as accounts payable, short-term loans) and non-current liabilities (such as long-term loans, bonds). Liabilities are listed in order of maturity, with current liabilities listed first.

- Shareholders' Equity:
Shareholders' equity represents the owners' interest in the company and is calculated as total assets minus total liabilities. It includes share capital, reserves, and retained earnings.

- Compliance with Schedule 3:
Companies are required to prepare their balance sheet in accordance with the format prescribed in Schedule 3 of the Companies Act 2013. This ensures consistency and comparability in financial reporting across different companies.