Kurmangaliyeva A.K.
Senior Lecturer of the Department of Accounting and Auditing
Kostanai State University
A.Baitursynov, Kazakhstan
The balance sheet as a form of
accountability, its structure
The basis of life and the development of human society is the process of
material production in which created a commodity and a means of labor. Created
in the production of material goods are distributed, traded and used in
industrial and personal consumption. To manage these processes is necessary to
have information about them. The information describing the actual state of
economic activity occurs and is transmitted in the system of economic
accounting, which refers to the important functions of management of the
economy, and hence the process of reproduction.
Currently being introduced in the new standard NAS (2013) on the basic
parameters comply with international accounting standards, as in recent years
in the Republic of Kazakhstan was an active process of accounting reform with a
focus on international experience, which was due, firstly, to the formation of
a new economic system, which is based on market relations, and, secondly, the
entry of our country into the world economy.
During the process of accounting reform in the Republic of Kazakhstan
formed new looks for the purposes of reporting, it has changed its orientation.
As a central form of financial statements, balance sheet allows us to
consider the balance sheet date of the composition and structure of property
companies, liquidity and turnover of current assets, own capital and
liabilities, the state and dynamics of accounts receivable and accounts
payable, creditworthiness and solvency of the company. Balance data allow us to
estimate the efficiency of capital allocation of the enterprise, it is sufficient
for the current and future economic activity, the size and structure of the
sources of borrowing, as well as the effectiveness of their involvement. Thus,
the balance sheet is the most informative way to evaluate and assess the
financial position of a business entity.
The balance sheet of the company allows us to give an overall assessment of
the changes in all of its property, to allocate part of its current (mobile)
and non-current (immobilized) means to study the dynamics of the structure of
the property. Indicators of structural dynamics reflect the proportion of
participation of each type of property in the general change in total assets.
Their analysis suggests that in which assets invested again attracted financial
resources or any assets decreased due to the outflow of financial resources.
Therefore, the balance sheet becomes the basis of information subsequent
analytical calculations for decision-making in the enterprise.
The purpose of the analysis of the balance of the company is to provide good-quality,
reliable information on liquidity, solvency, financial stability and
profitability of the enterprise. Only on the basis of in-depth and thorough
analysis can objectively evaluate the activities of the company, provide
specific proposals to the management for making management decisions to improve
the health and strengthen the financial condition of the company, to make
objective, science-based and optimal management, production, and especially
financial decisions.
With the help of financial analysis, it is possible to quickly identify and
assess financial risks, estimate the likelihood of bankruptcy and find reserves
of the enterprise and improve its solvency.
The balance sheet reflects the subject of the availability of resources for
a certain period (the end of the reporting period). But in fact, the resources
of the subject are in constant motion, and under the influence of continuous
business transactions made their presence and composition changes continuously.
Each business transaction that occurs in the subject, change the size and
composition of its resources, and therefore the balance. At the same time it
(step) causes these resources double change.
Changes in economic resources and power is reflected in the balance sheet
generally in the form of increases or decreases in amounts corresponding
balance sheet items.
Changes in the balance of the subject under the influence of business
operations are divided into four groups or types.
The first type, or group, include changes in the balance sheet under the
influence of business transactions associated with changes in the economic
resources from one form to another. They only affect the asset balance, change
the composition of economic resources (assets), but do not change the total
balance (ΣA + O - O P = Σ where Σ - sum, and - asset About -
operation, P - passive). For example, the release of materials in production.
The second type, or group, include changes in the balance sheet under the
influence of business transactions related to the transition of power resources
in the other (the redistribution of resources). They affect only the liability
balance, change the amount of individual sources, but does not reduce the total
amount of balance and equality of outcomes of assets and liabilities is not
affected (Σ A = Σ P + O - O). For example, the allocation of income
in other reserve capital.
The third type, or group, include changes in balance under the influence of
transactions that are associated with the arrival of the subject new resources.
They affect the assets and liabilities of balance, change the amount of certain
types of resources and their sources upward and increase the total amount of
balance in the amount accompli of this type of business operations (Σ A +
O = Σ P + O).
For example, receipt of materials from the suppliers.
The fourth type of change include changes in the balance sheet under the
influence of economic operations which are connected with the disposal of the
resources of their economic resources. They affect the assets and liabilities
of balance, reduce the amount of certain types of economic resources and their
sources, and change the total amount of the balance to decrease (Σ A - O =
Σ P - O). For example, the repayment of the loan with the bank customer's
current account in the bank.
Executives and managers of the company are not able to study in detail the
operational information. They use the summaries and other information for the
performance of its management duties. Accounting information, specially
prepared to help managers, called the accounting and management information.
With the help of accounting and management information managers carry out their
management functions: planning, implementation of decisions, monitoring.
Accounting is linked with all kinds of activities in any of them use
accounting information for management decisions.
Accounting function to provide quantitative information, mainly of a
financial nature, of the economic entities in order to use this information to
make management decisions
Everything has a cost, the company belongs to and is reflected in the asset
balance is called its assets. Balance sheet assets contain information about
the decision of capital available to the Company, about investing it in a
particular property and tangible assets of the company's expenses for
production and sales of products and outstanding free cash flow. Each type of
capital allocation corresponds to a separate balance sheet item.
By the structure of the balance sheet consists of two series of numbers -
the assets and liabilities, the results of which are always equal. On the
credit side of the balance sheet for the NAS contained articles that appear
certain groups of assets and property rights to them, united in stages,
depending on the circulation of funds in the "Current assets" and
"Non-current assets". In forming the structure of the asset balance
articles are arranged in order of decreasing liquidity, that is, depending on
the speed with which this part of the property gains in economic turnover of
cash.
Thus, on balance NAS current assets are classified into: cash, short-term
investments, short-term receivables, inventories, current tax assets, long-term
assets held for sale, other short-term assets.