Balance Sheet

1
Balance Sheet

• Limitations
• Most assets are recorded at historical cost
  rather than at market value.
• Resources such as employee skills and reputation
  are not recorded on the balance sheet.

• Usefulness
• Liquidity information.
• Long-term solvency information.

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Case 3-5

• Which items require further disclosure?

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Balance Sheet
Resources (Assets)
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Assets are probable future economic benefits
obtained or controlled by a particular entity as
a result of past transactions or events.
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Assets
Cash Receivables Inventories Prepayments
Current Assets
Converted to cash or consumed within one year or
the operating cycle, whichever is longer
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Assets
Investments and Funds Property, Plant,
Equipment Intangibles Other
Noncurrent Assets
Not expected to be converted to cash or consumed
within one year or the operating cycle, whichever
is longer
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Liabilities are probable future sacrifices of
economic benefits arising from present
obligations of a particular entity to transfer
assets or provide services to other entities as a
result of past transactions or events.
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Liabilities
Accounts Payable Notes Payable Accrued
Liabilities Current Maturities of Long-Term Debt
Current Liabilities
Obligations expected to be satisfied through
current assets or creation of other current
liabilities
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Liabilities
Capital Leases Bonds Payable Long-Term Notes
Payable Pension Liabilities
Long-Term Liabilities
Obligations that will not be satisfied within one
year or operating cycle, whichever is longer
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Equity is the residual interest in the assets of
an entity that remains after its liabilities are
deducted.
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Shareholders Equity
Other Contributed Capital
Capital Stock
Retained Earnings
Treasury Stock
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Some Examples

• SEARS Balance Sheet
• Sears Footnotes
• Kohl's Balance Sheet
• Kohls Footnotes

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Disclosure Notes

• Summary of Significant Accounting Policies
• Subsequent Events
• Noteworthy Events and Transactions

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Management Discussion and Analysis (MDA)
Includes managements views on significant
events, trends, and uncertainties regarding the
companys operations, liquidity, and capital
resources.
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Coachs Balance Sheet
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Coachs Balance Sheet