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About balance sheet

Ramesh Patel (Article assistant) (38 Points)

08 January 2016

Hello everyone.!

kindly answer for this if anyone know

is it necessary that the balance sheet should show increasing trend?

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11 Replies

kajal kadmiya (student) (56 Points)
Replied 08 January 2016

Balance Sheet reflects the fianancial positon of Company. It is not at the discretion of those who prepare Balance Sheet. It should be prepared as per Schedule III of Companies Act, 2013 and should reflect true and fair position of COmpany. There is no such a concept of Increasing or decreasing trend.

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kajal kadmiya (student) (56 Points)
Replied 08 January 2016

1 Like

Ashish Dey (Consultant) (38 Points)
Replied 08 January 2016

Trend is not shown at the time of preparation of balance sheet. Since is a practice done by auditors to comply with Standard on Auditing i.e. SA 520

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Ramesh Patel (Article assistant) (38 Points)
Replied 08 January 2016

i prepared a balance sheet

But the company MD says that fund should be in any one form of asset

how the total can be less than preivious balance sheet total.

and i checked many other companies BS all most all shows incresing trend

kindly suggest on this matter

Ajit Hegde (CA - Final) (1367 Points)
Replied 08 January 2016

Increasing trend and preperation of Balance Sheet are two different components. Increasing trend is more of a financial nature where as the latter is related to complaince framework

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Ashish Dey (Consultant) (38 Points)
Replied 08 January 2016

Dear Ramesh

It is not about that figure in balance shouid always be in increasing trend..Since an all case we have to comply with Schdule III of Company act 2013.

Since it is the requirment of company act 2013 to give true and fair view.

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Ashish Dey (Consultant) (38 Points)
Replied 08 January 2016

Dear Ramesh

It is not about that figure in balance shouid always be in increasing trend..Since an all case we have to comply with Schdule III of Company act 2013.

Since it is the requirment of company act 2013 to give true and fair view.

1 Like

Manish Chauhan (article) (23 Points)
Replied 08 January 2016

Dear, Trend is just for the comparison of the company's financial position with last year figures. Trend reflects the performance of the company in the current year compared to last year.

Niraj Bista (A/C) (70 Points)
Replied 08 January 2016

Trend analysis is only for management purposes as auditor u can perform as per SA 520, for comparison purpose. It doesn't means that financial performance and position Should be in increasing trend. Trend analysis is a technique of audit u do for better knowledge. It is not for preparation and presentation of financial statements. So it is not mandatory to be the balance sheet should shows increasing trend. Comply the regulatory reporting free work ie. Schedule III which doesn't says any trend analysis.

sambhaji (assistant manager) (43 Points)
Replied 09 January 2016

It is not necessary that the BS should be increasing trend but financials i.e. ratio & sales, capital, reserve must be increasing and improving trend for bank finance purpose.