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With the introduction of IFRS in Nigeria, it is now referred to as a statement of financial position. Balance sheet can be defined as the statement that shows the presentation of the summary of assets and Liabilities in a well-arranged form, so that the financial position may be clearly ascertained. The balance sheet is not part of the double-entry therefore, there is no debit or credit side.

Nature of Balance Sheet

Balance sheet is drawn up at a certain date and is not an account. It is divided into two parts showing on the left Liabilities and Capital. On the right side the current and Fixed assets.

The Balance sheet must be headed as “Balance sheet as at 31st….”

Information Disclosed by the Balance Sheet

(i). The nature and extent of the asset.

(ii). The Solvency or otherwise of the business

(iii). The nature liabilities

(iv). Information as to over or under trading.


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