7.01 Definition:
A balance sheet is
a statement, drawn up at a particular point in time, of the
values of assets owned and of liabilities outstanding. The
balancing item is called net worth (B.90).
The stock of the assets and liabilities recorded in the balance
sheet is valued at the market prices prevailing on the date to
which the balance sheet relates.
7.02 A balance sheet is drawn up for sectors, the total economy and the rest of the world.
For a sector the balance sheet shows the value of all assets – produced, non-produced and financial – and liabilities and the sector's net worth.
For the total economy the balance sheet provides as balancing item what is often referred to as national wealth – the sum of non-financial assets and net financial assets with respect to the rest of the world.
The balance sheet for the rest of the world, called the external assets and liabilities account, consists entirely of financial assets and liabilities.
7.03 Corporations are seen to have a net worth in addition to the value of the shares and other equity issued. In the case of quasi-corporations, net worth is zero, because the value of the owners’ equity is assumed to be equal to its assets less its liabilities. Therefore, the net worth of resident direct investment enterprises, which are branches of non-resident enterprises and are therefore treated as quasi-corporations, is zero.
7.04 The difference between total financial assets and total liabilities is called net financial assets (see paragraph 7.67.).
7.05 For the non-financial and the financial corporations sectors the calculation of own funds provides an analytically meaningful indicator.
Own funds are the sum of net worth (B.90) and shares and other equity (AF.5) issued.
7.06 The balance sheet completes the sequence of accounts, showing the ultimate result of the entries in the production, distribution and use of income, and accumulation accounts (see chapter 8.: Sequence of accounts and balancing items).
7.07 A balance sheet relates to the value of assets and liabilities at a particular moment of time. Balance sheets are to be compiled at the beginning of the accounting period (the same as the end of the preceding period) and at its end.
7.08 A basic accounting identity links the opening balance sheet and the closing balance sheet:
the value of the stock of a specific type of asset in the opening balance sheet;
plus transactions: the total value of the assets acquired, less the total value of those disposed of, in transactions that take place within the accounting period: transactions in non-financial assets are recorded in the capital account and transactions in financial assets in the financial account;
minus consumption of fixed capital;
plus other volume changes: the value of other positive or negative changes in the volume of the assets held (for example, as a result of the discovery of a subsoil asset or the destruction of an asset as a result of war or a natural disaster): these changes are recorded in the other changes in volume of assets account;
plus revaluations: the value of the positive or negative nominal holding gains accruing during the period resulting from a change in the price of the asset: these changes are recorded in the revaluation account;
is identical with the value of the stock of the asset in the closing balance sheet.
The accounting links between the opening and closing balance sheets via transactions and other changes in assets (other changes in volume and holding gains) are shown schematically in Annex 7.2.