Читать книгу Corporate Finance For Dummies - Michael Taillard - Страница 74

The Securities and Exchange Commission (SEC) requires that all corporations maintain a balance sheet and highly recommends that any business keep one (the distinction being that corporations are publicly-owned companies that are legally required to fulfill these reporting obligations to its shareholders and other regulators).

After all, the SEC’s main purpose is to illustrate the exact value of a company in the very moment that the data are collected. Unlike other financial reports, the balance sheet doesn’t compile data over a period of time. Instead, it reports the value of all the assets the company currently has, divided into relevant categories, and then also includes the value of the company’s liabilities and owners’ equity, each divided in a manner similar to assets.

Here’s the basic formula for the balance sheet:

Assets = Liabilities + Owners’ equity

So the total value of all assets equals the total value of all liabilities plus all owners’ equity. If the two sides of the equation don’t balance, then someone did something wrong, and it’s time for some no-holds-barred combat accounting! Hooah!