Although the balance sheet was first implemented just a couple of centuries ago, it has quckly developed and sophisticated to become nowadays a widely used and powerful tool in the hands of professional users, well known and popular even among the mass public. In spite of its prominence, or may be because of it, the balance sheet can not be easily and fully described in a few words, but still, if we leave aside its various functions and forms and any other subjective factors, we can state that the balance sheet is a summary of an enterprises' assets, liabilities and equity at a specific moment of time. To simplify this description even further we could say that the balance sheet shows an entity's possessions, obligations and others' debts to it.The "objective" point of view however is often too restrictive, and the most simple things many times prove to be rather complex...Among the thousand more complex definitions appended to the balance sheet one of my favorites is the definition given by .... according to which the balance sheet is a statement meant to communicate information about the financial position of an enterprise at a particular point in time, summarizing the information contained in accounting records in a clear and intelligible form, giving information about the financial state of an enterprise and indicating the relative liquidity of the assets, showing the liabilities of the enterprise (i.e. what the enterprise owes and when these amounts will fall due), able to assist the user in evaluating the financial position of the enterprise, being however only part of the data needed by users. Or to summarize this long description with which I completely agree, I could say that although the balance sheet is one of the most outstanding instruments in the hands of financial analysts, managers, investors and other users, its importance should not be over emphasized, it has to be viewed along with many other documents, and it is fa...
