Form of Balance Sheet, Part 1 to Schedule VI of the Companies Act, 1956 gives the format in which the balance

sheet is to be prepared. The schedule specifies 2 types of formats, the horizontal format and the vertical format. A company can prepare its balance sheet in either of the 2 formats. In the horizontal format, the liabilities including the share capital are placed on the left side and assets of all types on the right. The main heads in this form are arranged as under: (a) Share Capital (a) Fixed assets (b) Reserves and surplus (b) Investments (c) Loans (c) Current assets, loans and advances (d) Current liabilities and (d) Miscellaneous expenditure to the provisions extent not written off or adjusted

(e) Profit & Loss Account ----------- ----------Total ----------- ----------In the vertical format, the various heads of liabilities and assets are arranged vertically and current liabilities are shown as deduction, from current assets. Whatever information which is required to be given in the horizontal format must also be given in the vertical format. Summarised prescribed vertical form of balance sheet is given below: I. Sources of Funds (1) Shareholders' funds (2) Loan funds ---------------------Total ---------------------II Application of Funds (1) Fixed assets (2) Investments (3) Current assets, loans and advances Less: Current liabilities & provisions (4) (a) Miscellaneous expenditure to the extent not written off or adjusted (b) Profit & Loss Account ---------------------Total ----------------------

The Central Government may, on the application or with the consent of the Board of Directors of the company, by order, modify in relation to that company, any of the requirements as to matters to be stated in the company's balance sheet or profit and loss account for adapting them to the circumstances of the company. Contents of Profit and Loss Account Though no format has been prescribed for the profit and loss account, Part II to Schedule VI of the Companies Act, 1956 gives a list of items which must be disclosed in every profit & loss account. Every profit and loss account of a company must give a true and fair view of the company's profit or loss for the financial year for which it is drawn up.