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    Classified Balance Sheet


    A classified balance sheet presents information about an entity's assets, liabilities, and shareholders' equity that is aggregated (or "classified") into subcategories of accounts. It is extremely useful to use classifications, since information is then organized into a format that is more readable than a simple listing of all the accounts that comprise a balance sheet. When information is aggregated in this manner, a balance sheet user may find that useful information can be extracted more readily than would be the case if an overwhelming number of line items were presented.

    The most common classifications used within a classified balance sheet are:

    • Current assets
    • Long-term investments
    • Fixed assets (or Property, Plant, and Equipment)
    • Intangible assets
    • Other assets
    • Current liabilities
    • Long-term liabilities
    • Shareholders' equity

    The sum of these classifications must match this formula:

    Total assets = Total liabilities + Shareholders' Equity

    The classifications used can be unique to certain specialized industries, and so will not necessarily match the classifications shown here. Whatever system of classification is used should be applied on a consistent basis, so that balance sheet information is comparable over multiple reporting periods.

    There is no specific requirement for the classifications to be included in the balance sheet. The following items, at a minimum, are normally included in the balance sheet:

    Current Assets:

    • Cash and cash equivalents
    • Trade and other receivables
    • Prepaid expenses
    • Investments
    • Inventories
    • Assets held for sale

    Long-Term Investments:

    • Investments in other companies

    Fixed Assets:

    • Computer hardware
    • Computer software
    • Furniture and fixtures
    • Leasehold improvements
    • Office equipment
    • Production equipment
    • Accumulated depreciation

    Intangible Assets:

    Current Liabilities:

    • Trade and other payables
    • Accrued expenses
    • Current tax liabilities
    • Current portion of loans payable
    • Other financial liabilities
    • Liabilities held for sale

    Long-Term Liabilities:

    Shareholders' Equity:

    Classified Balance Sheet Example

    Here is an example of a classified balance sheet, where the classifications are listed in bold in the first column:

    Holystone Dental Corp.
    Statement of Financial Position

    (000s) as of 12/31/x2 as of 12/31/x1
    ASSETS    
    Current assets    
    Cash and cash equivalents $270,000 $215,000
    Trade receivables 147,000 139,000
    Inventories 139,000 128,000
    Other current assets 15,000 27,000
    Total current assets 571,000 509,000
         
    Fixed assets    
    Furniture and fixtures 551,000 529,000
    Leasehold improvements 82,000 82,000
    Office equipment 143,000 143,000
    Total non-current assets 776,000 754,000
         
    Total assets $1,347,000 $1,263,000
         
    LIABILITIES AND EQUITY    
    Current liabilities    
    Trade and other payables $217,000 $198,000
    Short-term borrowings 133,000 202,000
    Current portion of long-term borrowings 5,000 5,000
    Current tax payable 26,000 23,000
    Accrued expenses 9,000 13,000
    Total current liabilities 390,000 441,000
         
    Long-term liabilities    
    Long-term debt 85,000 65,000
    Deferred taxes 19,000 17,000
    Total non-current liabilities 104,000 82,000
         
    Total liabilities 494,000 523,000
         
    Shareholders’ Equity    
    Capital $100,000 $100,000
    Additional paid-in capital 15,000 15,000
    Retained earnings 738,000 625,000
    Total equity 853,000 740,000
         
    Total  liabilities and equity $1,347,000 $1,263,000

     
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