Balance Sheet & Major Heading of Balance Sheet in BFIs


What is Balance Sheet?

  • Balance sheet is the financial statement that presents the capital, assets and liabilities of any organization of any point of time.
  • Balance sheet shows the financial position of the firm. So, it is also known as financial indicator of the firm.
  • Balance sheet includes the capital nature transactions.
  • It is not a ledger but statement only.

Methods of Making Balance Sheet in Nepal

  • First we have to prepare the income statement in order to find out the net profit, net loss, surplus or deficit.
  • If there is a provision of regularity authority of respective industry then follow their standard otherwise follow accounting standard.
  • All the capital nature transaction should be classified as per liquidity base.
  • A traditional T format of modern vertical format can be used.
  • All the capital nature transaction should be included.
  • Bank and Financial Institutions should follow the unified directive no.4 by Nepal Rastra Bank by using vertical V format with liquidity marshaling.

Format of Balance Sheet of  BFIs as per NRB Directive

Following format is the modern V format used in the banks and financial institutions of Nepal directed by the Nepal Rastra Bank unified directive. The specimen of the balance sheet with major headings as per the unified directives are as follows.

Format of Balance Sheet of bank

Example of Balance Sheet [Normal]

Capital & Liabilities A.N. Amount Assets A.N Amount
Share capital *** Fixed Assets ***
Reserve & Surplus *** Investment ***
Long term debt *** Current Assets ***
Current Liabilities *** Fictitious Assets ***
  • Share capital = Amount invested by promotors
  • Reserve and Surplus = Not distributed profit
  • Current liabilities = Debt to be paid within 1 year period
  • Long term debt = Debt to be paid after 1 year of time
  • Current Assets = Assets which can be converted into money within 1 year period
  • Fictitious Assets = Heavy loss

Why Balance Sheet is Prepared?

Balance sheet is prepared in order to:-

  1. Show the financial position of the organization.
  2. Present the status of capital, assets and liabilities of the organization.
  3. Show the information of capital nature transactions.
  4. Create transparency.
  5. Maintain financial discipline.
  6. Create the culture of transparency and accountability.
  7. Support auditing.
  8. Analyze strength and weakness of the firm.
  9. Support corporate good governance.

Other Posts

  1. Format of PL Account (Major Headings as per NRB Directive)
  2. Functions Duties and Powers of the CEO – as per BAFIA 2073
  3. Concept of Banking System
  4. BAFIA 2073 Major Highlights
  5. Company Act Highlights – Banking Notes
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