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Corporate Accounting and Auditing · Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013)

Schedule III Balance Sheet Format: Assets Side

Updated 10 October 2026 · Fact-checked

Under Schedule III, the assets side of a company balance sheet is split into non-current assets (PPE, capital work-in-progress, intangibles, non-current investments, long-term loans, deferred tax) and current assets (inventories, current investments, receivables, cash, short-term loans). Classify each item by its nature and realisation period, apply adjustments, then show it under the right head with the right total.

Understand Format of Balance Sheet: Assets

A company balance sheet is not drawn in free style. Schedule III of the Companies Act, 2013 gives the format, and Division II (Ind AS) follows the same vertical layout with Equity and Liabilities first, then Assets. This page covers the assets part.

Assets are first divided into non-current assets and current assets. This matches the principle in Ind AS 1 (paragraph 60): an entity presents current and non-current assets as separate classifications, unless a liquidity-based presentation is more reliable and more relevant. Then every asset is placed under a standard head.

Non-current assets usually include: property, plant and equipment; capital work-in-progress; investment property; goodwill and other intangible assets; intangible assets under development; non-current investments; deferred tax assets (net); long-term loans and advances; and other non-current assets. Under Ind AS Division II, financial assets such as investments, trade receivables, loans and cash are grouped under a sub-head 'Financial assets'.

Current assets usually include: inventories; current investments; trade receivables; cash and cash equivalents; bank balances other than cash and cash equivalents; short-term loans and advances; and other current assets. In broad terms, an asset is current if it is expected to be realised, sold or consumed in the normal operating cycle, held mainly for trading, due to be realised within twelve months after the reporting date, or is cash or a cash equivalent not restricted for use. Everything else is non-current.

Two points from the Ind AS 1 text matter. Paragraph 56 says deferred tax assets (liabilities) are never classified as current, so they always sit under non-current. Paragraph 55 and 57 allow extra line items and changed descriptions where this helps understanding, as the standard does not prescribe the order or format of items.

Key rules to remember

Net block of PPE
Net carrying amount = Gross cost − Accumulated depreciation − Accumulated impairment
Show gross block, depreciation and net block in the note. The balance sheet carries the net amount.
Trade receivables (net)
Trade receivables = Debtors − Bad debts written off − Provision for doubtful debts
Bills receivable are part of trade receivables. Show secured, unsecured and doubtful categories in the note.
Inventories
Inventory = Lower of cost and net realisable value, for each item or group
Show raw materials, WIP, finished goods, stock-in-trade, stores and spares separately in the note.
Cash and cash equivalents
Cash and cash equivalents = Cash in hand + Bank balances (unrestricted) + Short-term highly liquid deposits
Restricted or earmarked balances and longer deposits go to 'Other bank balances' or other non-current/current assets.
Classification rule: current asset
Current if: realised or consumed in the operating cycle, or held for trading, or realisable within 12 months, or unrestricted cash
Otherwise non-current. Deferred tax assets are never current (Ind AS 1, para 56).
Total assets check
Total assets = Total equity and liabilities
The balance sheet must tally. A difference signals a missed adjustment or misclassification.

How to solve Format of Balance Sheet: Assets questions

Use this order for any question that asks you to prepare the assets side of a balance sheet from balances and adjustments.

  1. 1List all balances given and mark each as an asset, liability, capital item or an expense/income item. Only assets go to this side.
  2. 2Apply each adjustment to the right asset figure first, for example depreciation on PPE, provision on debtors, closing stock valuation, accrued income.
  3. 3Check the realisation period of each item. Investments, loans and deposits need a long-term or short-term tag. Use 'due within 12 months' for current.
  4. 4Place each item under its standard Schedule III head and sub-head: PPE, intangibles, non-current investments, and so on.
  5. 5Compute sub-totals for non-current assets and current assets, then the grand total.
  6. 6Match the total with equity and liabilities. If it differs, recheck adjustments, especially profit carried to reserves.
  7. 7Add short notes (PPE schedule, receivables, cash and cash equivalents) where marks are allotted for working notes.

Quickest way: Head-wise bucket method

When to use it: Use when the question gives a long trial balance with several adjustments and time is short.

  1. Draw two columns on the answer sheet: Non-current and Current, with the Schedule III heads pre-written.
  2. Go through the trial balance once. Tick each asset and drop its adjusted figure into its bucket.
  3. Handle adjustments by writing the adjusted figure straight into the bucket, with a one-line working beside it.
  4. Add each bucket, then add both totals. Compare with equity and liabilities.
  5. Copy the final figures into the presentation format with note numbers.

Common mistakes in Format of Balance Sheet: Assets

  • Showing gross PPE without deducting accumulated depreciation.

    Students copy the trial balance figure and forget the year's depreciation adjustment.

    Fix: Always compute closing net block = cost − total depreciation to date, and show it as one line.

  • Treating deferred tax asset as a current asset.

    Students think any receivable-like item is current.

    Fix: Remember Ind AS 1 para 56: deferred tax assets are not classified as current. Show them under non-current.

  • Putting all investments under current assets.

    Investments look liquid, so students ignore intention and holding period.

    Fix: Split investments: those held for the long term go to non-current; those readily realisable and held for under 12 months go to current.

  • Showing provision for doubtful debts as a liability.

    The word 'provision' triggers the liabilities side.

    Fix: Deduct it from trade receivables. Show receivables net, with the gross and provision in the note.

  • Including fixed deposits with long maturity in cash and cash equivalents.

    Students treat every bank balance as cash.

    Fix: Include only unrestricted balances and short-term, highly liquid items. Show other deposits separately under other bank balances or non-current assets by maturity.

  • Mixing up capital work-in-progress with PPE.

    Both relate to fixed assets and look alike in a trial balance.

    Fix: Show assets not yet ready for use as capital work-in-progress, and intangibles being developed as intangible assets under development, on separate lines.

Worked examples

Example 1

From the following balances of Kaveri Industries Ltd. as on 31 March, show the assets side of the balance sheet. Plant and machinery at cost ₹40,00,000 (accumulated depreciation up to the beginning ₹8,00,000; depreciation for the year ₹4,00,000); Goodwill ₹3,00,000 (amortisation for the year ₹50,000 not yet charged); Long-term investments ₹6,00,000; Inventories ₹9,00,000; Trade receivables ₹7,50,000 (provision for doubtful debts to be made at 10%); Cash and bank (unrestricted) ₹2,50,000.

Show the solution
  1. Plant and machinery: net block = 40,00,000 − 8,00,000 − 4,00,000 = ₹28,00,000.
  2. Goodwill after amortisation = 3,00,000 − 50,000 = ₹2,50,000, an intangible asset.
  3. Provision on receivables = 10% of 7,50,000 = ₹75,000. Net receivables = 7,50,000 − 75,000 = ₹6,75,000.
  4. Non-current assets = 28,00,000 + 2,50,000 + 6,00,000 = ₹36,50,000.
  5. Current assets = 9,00,000 + 6,75,000 + 2,50,000 = ₹18,25,000.
  6. Total assets = 36,50,000 + 18,25,000 = ₹54,75,000.

Answer: Non-current assets: PPE ₹28,00,000; Intangible assets ₹2,50,000; Non-current investments ₹6,00,000; total ₹36,50,000. Current assets: Inventories ₹9,00,000; Trade receivables ₹6,75,000; Cash and cash equivalents ₹2,50,000; total ₹18,25,000. Total assets ₹54,75,000.

Example 2

Meenakshi Traders Ltd. has these balances: Building at cost ₹25,00,000 with accumulated depreciation ₹5,00,000 (no further charge to be made); Capital work-in-progress ₹4,00,000; Investments ₹5,00,000, of which ₹2,00,000 are shares to be sold within three months and the rest are held long term; Loans to employees ₹1,20,000, of which ₹40,000 is recoverable after 12 months of the reporting date; Closing stock at cost ₹6,00,000, whose net realisable value is ₹5,60,000; Cash in hand ₹30,000; Deferred tax asset ₹90,000. Prepare the assets side.

Show the solution
  1. Building net block = 25,00,000 − 5,00,000 = ₹20,00,000. Add CWIP ₹4,00,000 on a separate line. Total PPE and CWIP = ₹24,00,000.
  2. Investments: non-current = 5,00,000 − 2,00,000 = ₹3,00,000. Current = ₹2,00,000.
  3. Loans: recoverable after 12 months ₹40,000 is non-current. Balance 1,20,000 − 40,000 = ₹80,000 is current.
  4. Inventory is shown at the lower of cost ₹6,00,000 and NRV ₹5,60,000, so ₹5,60,000.
  5. Deferred tax asset ₹90,000 is non-current (Ind AS 1, para 56).
  6. Non-current assets = 24,00,000 + 3,00,000 + 40,000 + 90,000 = ₹28,30,000.
  7. Current assets = 2,00,000 + 80,000 + 5,60,000 + 30,000 = ₹8,70,000.
  8. Total assets = 28,30,000 + 8,70,000 = ₹37,00,000.

Answer: Non-current assets ₹28,30,000 (PPE ₹20,00,000; CWIP ₹4,00,000; non-current investments ₹3,00,000; long-term loans ₹40,000; deferred tax asset ₹90,000). Current assets ₹8,70,000 (current investments ₹2,00,000; short-term loans ₹80,000; inventories ₹5,60,000; cash ₹30,000). Total assets ₹37,00,000.

Exam tips

  • In MCQs, the usual traps are the head under which an item goes (for example deferred tax asset, CWIP, advance for capital goods) and the current/non-current split. Memorise the standard heads.
  • In written answers, show the PPE net block and receivables net working as separate notes. Step marks are often given for these workings.
  • Always apply the lower of cost and NRV to inventories and state it in one line.
  • Split items like loans and investments by the 12-month test, and write the split clearly in your working.
  • Check that your total assets equal total equity and liabilities. If they do not, find the error before moving on.

Practice questions from Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013)

Format of Balance Sheet: Assets in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Format of Balance Sheet: Assets: frequently asked questions

What is the difference between current and non-current assets in Schedule III?

Current assets are cash, or items expected to be realised, sold or used within the operating cycle or within twelve months of the reporting date, or held for trading. All other assets are non-current. Deferred tax assets are always non-current under Ind AS 1.

Where do intangible assets appear in the balance sheet?

They appear under non-current assets. Goodwill, software and other intangibles are shown at net carrying amount. Intangibles still being developed go on a separate line as intangible assets under development.

Can an entity present assets in order of liquidity instead of current and non-current?

Yes, but only when that presentation gives reliable and more relevant information, as under Ind AS 1 paragraph 60. Financial institutions are a typical example. A mixed basis is also allowed for entities with diverse operations.

Do I need to show notes on the assets side in exams?

Show working notes for PPE, receivables, inventories and cash where the question gives adjustments. They earn step marks and make your final figures easy to check.