A Guide to the New Language of Accounting and Finance

B

Balance Sheet, sometimes referred to as the equity statement or statement of financial position, shows the totals of a company’s assets, liabilities, and shareholders’ equity at a particular date. It is one of the three financial statements used to evaluate a business; the other two are the cash flow statement and the income statement. Edwards (2014) described the development of the balance sheet and its history. The mathematics of the balance sheet equation Assets (A) − Liabilities (L) = Capital (C) has become a foundation for teaching bookkeeping and was devised in 1494 by Pacioli’s Summa de Arithmetica Geometria Proportioni et Proportionalita (Sangster and Scataglinibelghitar 2010). FASB is attempting to improve guidance used to determine ...