Aqid ERPWhat the business owns, owes and is worth, on one day
The balance sheet, called the statement of financial position (قائمة المركز المالي) under IFRS, lists assets, liabilities and equity at a date. The two sides are equal by construction: everything the business owns was financed either by what it owes or by its owners. The sample is the year-end position of a small trading company with equipment, receivables, stock and an end-of-service provision.
- Assets: cash and bank, receivables, inventory, equipment net of depreciation; in the filed statements split into current and non-current.
- Liabilities: payables, VAT payable, the end-of-service benefit provision, loans; also split current and non-current.
- Equity: capital, retained earnings; the net profit of the year arrives here.
- Total assets equal total liabilities plus equity.
The sample position
Assets of 411,080.00 against liabilities of 118,080.00 leave equity of 293,000.00: capital of 100,000.00 and retained earnings of 193,000.00, which include the 116,025.00 profit of the sample income statement. The end-of-service provision of 43,000.00 is what the Labour Law would require the company to pay its employees if they all left today: half a month's wage per year for the first five years and a full month after, on the last wage.
| Total assets | 411,080.00 |
|---|---|
| Total liabilities | 118,080.00 |
| Equity | 293,000.00 |
| Check | 118,080 + 293,000 = 411,080 |