General concepts of balance: assets, liabilities, balance currency

Balance is the main form of financial statements, which characterizes the financial and economic activities of the organization. It reflects all the funds (according to their composition and sources of occurrence on a given date) in monetary terms. Its structure has the form of a table on the left side of which the assets are represented - the composition of the property and its placement (money, receivables). And on the right side - liabilities, sources of education of all capital (reserves, accounts payable). Both parts consist of several sections, combining homogeneous groups of means, each kind is called an article and is located separately (in accordance with a certain line). The total amount of items (total) is the currency of the balance sheet, in which the amounts of the asset and liability are the same.
This equality is explained by the fact that each asset arises from an action, as a result of which both the funds themselves and the sources of their formation are reflected in the balance sheet at the same time. Thus, the balance currency coincides in two parts because of different points of view on the same items. In one case, what is represented by the means, and in the other - the one who invested them.

The composition of the asset balance is divided into working and non-negotiable funds. In the passive, however, current and long-term obligations are singled out with a fixed period during which all tangible assets should be used and the existing debts repaid. However, assets, like debts, can change their original appearance. So, the use of money can be set a limit, and Credit terms have been extended. All such changes need to be provided with information in the notes.

If the period of settlements with creditors and debtors was increased, the balance currency may grow. Although this growth also indicates the expansion of the economic activities of the organization. To find out specific reasons, a financial analysis should be carried out taking into account the inflationary processes for existing stocks.

Balance sheet data are required for the analysis and assessment of the company's economic state (when determining the total amount of obligations to counterparties). Using different coefficients of stability of the organization, you can see a vivid picture of its financial stability . When calculating many similar indicators, the balance currency is used. The formula for calculating the coefficient of autonomy, for example, has the following form: (KR + RRB) / WB, where KR is the capital with reserves; RPR - Reserves of future expenses, and WB is the balance currency.

In general, this report provides information to managers and all other persons involved in the management of the enterprise, about what the company owns, what its stocks and their correlation with material resources are, how they are used and who is responsible for their creation. The balance currency allows you to see the approximate cost of funds that can be obtained when the firm is liquidated. These data are used by outside institutions, such as the tax inspectorate, statistical bodies, creditors, etc.