Overview of Financial statement of banks
OVERVIEW OF FINANCIAL STATEMENT
Balance sheet(banking regulation act ,1949,sec 29)
Every banking company is required to prepare with reference to that year a balance sheet & p/L account as on the last working day of the year in the form(a)&form(b) respectively set out in the third schedule .
Assets &liabilities are shown in vertical form
Liabilities are shown in top line
Assets are shown in bottom line
Income statement/profit &loss account statement
It is a statement which shows the incomes &expenses of the bank.
It is a type of flow report, as compared to the balance sheet, which is a status report .
It is perpared in vertical form. Focuses on
Net income/profit/net earning:(revenues exceeds the expenses)
Net loss:(expenses exceeds the revenues)
Form‘b‘ of the Third schedule of the banking regulation Act 1949 is used.
Relationship between balance sheet & income statement
It is the total of the share capital which altd company is allowed to issue.it presents the upper boundary for the actually issued share capital.
Issued share capital
The total of share capital allocated to shareholders. less than authorised capital.
it is the portion of the issued capital which has been subscribed by all the investors including the public.
Called up share capital
It is the total amount of issued capital for which the shareholders are required to pay.this
may be less than the subscribed capital Paid up share capital
Is the amount of share capital paid by the shareholders. This may be less than the called
up capital as payments may be in instalments.
These are created in particular situation such as revaluation of assets,issue of shareas and debentures at premium.
Reserves(profit) appropriate for compliance of any law. Share premium:
Amount paid by shareholders for shares in excess of their nominal value