How to present the annual balance sheet of an enterprise?

The purpose of the balance sheet?

The balance sheet is considered a comprehensive financial statement that shows the aggregate value of the asset value as well as the sources of asset formation of a business at a certain time, be it 3 months, 6 months, or 1 year.

Pursuant to Point 1.1, Clause 1, Article 112 of Circular 200/2014/TT-BTC, the purpose of the balance sheet for enterprises that meet the assumption of continuous operation is as follows:

“Article 112. Instructions for preparing and presenting the annual Balance Sheet

1. Prepare and submit the Balance Sheet of the enterprise to meet the assumption of continuous operation

1.1. Purpose of the Balance Sheet

The balance sheet is a general financial report, reflecting the general picture The entire value of the enterprise’s existing assets and the sources of formation of those assets at a certain time. Data on the Balance Sheet show the entire value of the enterprise’s existing assets according to the structure of the assets and the structure of the capital sources that form those assets. Based on the Balance Sheet, it is possible to comment and evaluate the overall financial situation of the enterprise.

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Thus, preparing the balance sheet will show the entire value of the enterprise’s existing assets according to the financial structure and capital structure that form those assets. From there, it is possible to comment and evaluate the overall financial situation of the enterprise.

Principles of preparing and presenting an accounting balance sheet

For businesses that meet the assumption of routine operations:

Pursuant to Point 1.2, Clause 1, Article 112 of Circular 200/2014/TT-BTC, the principles for preparing and presenting the accounting balance sheet are specifically stipulated as follows:

*According to the provisions of Accounting Standards “Presentation of Financial Statements”, when preparing and presenting the Balance Sheet, it must comply with general principles on preparing and presenting Financial Statements. In addition, on the Balance Sheet, Assets and Liabilities must be presented separately as short-term and long-term, depending on the duration of the enterprise’s normal business cycle, specifically as follows:

– For businesses with a normal business cycle within 12 months, Assets and Liabilities are divided into short-term and long-term according to the following principles:

+ Assets and Liabilities recovered or paid within no more than 12 months from the time of reporting are classified as short-term;

+ Assets and Liabilities recovered or paid 12 months or more from the reporting date are classified as long-term.

– For businesses with a normal business cycle longer than 12 months, Assets and Liabilities are classified into short-term and long-term according to the following conditions:

+Assets and Liabilities that are recovered or paid within a normal business cycle are classified as short-term;

+Assets and Liabilities that are recovered or paid over a period longer than a normal business cycle are classified as long-term.

In this case, the enterprise must clearly explain the characteristics that determine the normal business cycle, the average time of the normal business cycle, and evidence of the production and business cycle of the enterprise as well as the industry and field in which the enterprise operates.

– For businesses that, due to the nature of their operations, cannot rely on the business cycle to distinguish between short-term and long-term, Assets and Liabilities are presented in descending order of liquidity.

* When preparing a general accounting balance sheet between superior units and subordinate units without legal status, the superior unit must exclude all balances of items arising from internal transactions, such as receivables, payables, internal loans… between the superior unit and subordinate units, and between subordinate units.

The technique of excluding internal items when synthesizing reports between superior and subordinate units with dependent accounting is performed similarly to the technique of consolidating financial statements.

* Indicators without data are exempt from being presented on the Balance Sheet. Enterprises proactively renumber the criteria according to the principle of continuity in each section.

For businesses that do not meet the going concern assumption:

Pursuant to Point 2.1, Clause 2, Article 112 of Circular 200/2014/TT-BTC, the provisions are as follows:

“2.1. The presentation of indicators of the Balance Sheet when the enterprise does not meet the assumption of continuous operation is done similarly to the Balance Sheet of the enterprise while in operation except for the following adjustments:

(a) Irrespective of short-term and long-term: The indicators are established regardless of whether the remaining period from the date of the report is over 12 months or more. no more than 12 months or more in an ordinary business cycle or in an ordinary business cycle;

(b) Do not present provisions for provisions because all assets and liabilities have been re-evaluated according to net realizable value, recoverable value or fair value;”

Basis for preparing the Balance Sheet?

Pursuant to Point 1.3, Clause 1, Article 112 of Circular 200/2014/TT-BTC, the provisions are as follows:

“1.3. Basis for preparing the Accounting Balance Sheet

– Based on general accounting books;

– Based on detailed accounting books, cards or detailed summary tables;

– Based on the previous year’s Balance Sheet (to present the first column of the year).”