A Balance Sheet is a financial statement that presents an overview of the company's financial position at a particular moment. It lists the company's assets, liabilities, and shareholders' equity by applying the basic equation:
Assets = Liabilities + Equity
Includes retained earnings, reserve, and share capital.
Assume that a company's assets are worth ₹10 crore, liabilities worth ₹6 crore, and equity worth ₹4 crore. The balance sheet ensures that:
₹10 crore (Assets) = ₹6 crore (Liabilities) + ₹4 crore (Equity)
In India, all the registered companies are required to prepare and submit their balance sheets annually as per the Companies Act, 2013. The form is standardized under Schedule III of the Act and must comply with Indian Accounting Standards (Ind AS).