Balance Sheet: The Account Format

The basic accounting equation, Assets = Claims, governs the format of the balance sheet. In the account form, assets appear on the left, claims on the right. An example is that of Nippon Telegraph and Telephone.


Each side of the equation is typically listed in the same order of liquidity, or likelihood of being converted to cash. Under U.S. GAAP, cash is usually the first asset listed, followed by other current assets. There are exceptions, however. For example, utilities commonly list fixed assets before current assets. International Accounting Standard (IAS) 1, Presentation of Financial Statements, does not prescribe a particular order or format, and some companies reporting under IAS also list fixed assets before current assets.

NTT presents the balance sheet for the previous two years in chronological order from left to right. Many (perhaps most) report in reverse chronological order. Particularly when comparing different companies it is important to make sure the order in which the dates are presented.

For more information, see all articles on: Accounting, Financial Statement Analysis, Fundamental Analysis

See also:
  • Balance Sheet: The Report Format
  • Allowance for Doubtful Accounts
  • Common Size Balance Sheets
  • Par Value of Shares and Additional Paid-in Capital
  • Retained Earnings
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