Balance Sheet vs Consolidated Balance Sheet | Top 9 Differences
The primary difference between a Balance Sheet and vs. Consolidated Balance sheet is that a Balance sheet is one of the company’s financial statements that present the company’s liabilities and assets at a particular point in time. In contrast, a Consolidated Balance Sheet is the extension of the balance sheet in which, along with the items of the company’s balance sheet, the items of the subsidiary companies’ Balance Sheet are also included.
Badwill
Badwill, also known as Negative Goodwill, is referred to in the case of mergers and acquisition transactions when a company purchases a target company for a price less than its fair market value. Companies selling below fair value or book value include financial distress, huge debt, hostile takeovers, uninformed sellers, or no potential acquirer.
Bad Debt Provision
Provision for bad debts is the estimated percentage of total doubtful debt that must be written off during the next year. It is done because the amount of loss is impossible to ascertain until it is proven bad. It is nothing but a loss to the company, which needs to be charged to the profit and loss account in the form of a provision.
Bank Reconciliation Examples
Bank reconciliation is done by bank customers, totally their records and their respective bank’s statements. As the bank provides its statement periodically (generally monthly, but sometimes more frequently if requested upon charge), there may be some differences between customers’ books of accounts and those of the bank, which generates the need for reconciliation .
Bank Balance Sheet vs Company Balance Sheet
A bank balance sheet preparation is complicated since the banking institutions will need to calculate their net loans, which is time-consuming. The items recorded in this balance sheet are loans, allowances, Short Term Loanetc. In contrast, preparing a company’s balance sheet is not that complicated and time-taking, and it records items like assets, liabilities, and net worth. Before we go into the nitty-gritty of the bank’s balance sheet and any regular company, first, we need to look into the nature of each.
Balance Sheet Reconciliation
Balance Sheet Reconciliation is the reconciliation of the closing balances of all the company accounts that form part of the company’s balance sheet to ensure that the entries passed to derive the closing balances are recorded and classified properly so that balances in the balance sheet are appropriate. A balance sheet reconciliation policy helps in gaining important insights into the financials of a company.
Balance Sheet Items
The items which are generally present in all the Balance sheet includes: Assets like cash, inventory, accounts receivable, investments, prepaid expenses, and fixed assets. Liabilities like long-term debt, short-term debt, Accounts payable, Allowance for the Doubtful Accounts, accrued and liabilities taxes payable. The Shareholders’ equity-like Share capital, additional paid-in capital, and retained earnings.
Balance Sheet Examples
The following balance sheet example outlines the most common Balance Sheets of US, UK, and Indian GAAP. It is impossible to provide a complete set that addresses every variation in every situation since there are thousands of such Balance Sheets. Each Balance Sheet example states the topic, the relevant reasons, and additional comments as needed.
Balance Sheet
A balance sheet is a financial document or statement that provides a complete overview of a firm’s assets, liabilities, and shareholders’ equity for a particular period. Preparing this document helps people understand the current capital structure of a firm. In addition, the clear information from the balance sheet lets investors decide whether to spend on the company’s assets.
Bad Debts
Bad debts are credits that businesses extend to customers, but the repayment of which seems uncollectable. In short, when the repayment is irrecoverable, the debt is bad. Such incidents occur when customers experience financial turmoil and struggle to repay the outstanding amount to businesses.
Bad Debt Reserve
A bad debt reserve, also known as the allowance for doubtful accounts, is the amount of provision made by the company against the accounts receivable present in the books of accounts of the company for which it is more likely that the company will not be able to collect the money in future.
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