Balance Sheet Date
The balance sheet date refers to the specific point in time at which a company’s financial position is assessed and presented on its balance sheet. This date is crucial because it provides a snapshot of the company’s assets, liabilities, and shareholders’ equity at that particular moment.
Financial statements, including balance sheets, are typically prepared at the end of a reporting period, such as monthly, quarterly, or annually. For example, if a company’s fiscal year ends on December 31, the balance sheet date for its annual financial statements would be December 31. The information on the balance sheet is valid and accurate as of that date, and any changes in the company’s financial position after that date will be reflected in the subsequent reporting period’s balance sheet.
Example of the Balance Sheet Date
Here’s an example of a simplified balance sheet as of December 31, 2023:
Company ABC Balance Sheet As of December 31, 2023
Assets Current Assets:
- Cash: $50,000
- Accounts Receivable: $30,000
- Inventory: $40,000 Total Current Assets: $120,000
- Property, Plant, and Equipment: $200,000
- Intangible Assets: $30,000 Total Non-Current Assets: $230,000
Total Assets: $350,000
Liabilities Current Liabilities:
- Accounts Payable: $20,000
- Short-term Loans: $10,000 Total Current Liabilities: $30,000
- Long-term Loans: $100,000 Total Non-Current Liabilities: $100,000
Total Liabilities: $130,000
Shareholders’ Equity
- Common Stock: $50,000
- Retained Earnings: $170,000 Total Shareholders’ Equity: $220,000
Total Liabilities and Shareholders’ Equity: $350,000
This balance sheet provides a snapshot of Company ABC’s financial position as of December 31, 2023. It shows the company’s assets, liabilities, and shareholders’ equity at that specific date. The balance sheet is used by investors, creditors, and other stakeholders to assess the financial health and stability of the company.
