How accurately and precisely show fds in a balance sheet ?

"can any expert come up with a step by step fool-proof methodology?"

No foolproof methodology available, specifically when accounting methods of bank & assessee differ, also due to interest rate changed due to premature withdrawal etc.
Practical solution is calculate interest as per your own process, and verify it with bank module. If major change or mistake on part of Bank, report it immediately for rectification. Minor difference are not objectionable, but deduct TDS as per bank issued form 16A. Segregate sav account interest for sec. 80TTA deduction.
 

I got your point.

But what should be the approach ?

shall the following approach will be right ?

approach 1:

(1) write sum of principals of all FDs in  the asset side.

(2) refer 26 AS and add (accrued interest 15 g/h +interest amount on which TDS has been deducted )

(3) subtract the interest that has been credited into SB account from asset side

(4) add (accrued interest 15 g/h +interest amount on which TDS has been deducted ) to the previous year's closing balance

Sorry to say. I have not understood your stand...

Practically, we follow as detailed below...

1. Sav bank interest is credited every quarterly to each saving account separately, so do not mix it with taxable FD interest, but make independent ledger.. (easier to deduct 80TTA claim).

2. For few FDs one ledger is created for all FDs, otherwise separate FD ledgers are created under one FD head.

3. Accrued interest of all these Fds are accumulated in one ledger which is adjusted to form 26AS & TDS deduction.