balansreikningi

Balansreikningur, often referred to as a balance sheet, is a financial statement that shows a company’s financial position at a specific date. It lists assets, liabilities, and equity, adhering to the accounting equation: Assets equal Liabilities plus Equity. The statement is used to assess liquidity, solvency, and capitalization, and to understand how resources are financed.

Assets are resources controlled by the entity expected to bring future economic benefits. They are typically categorized as current (cash and cash equivalents, inventories, receivables) and non-current (property, plant and equipment, intangible assets). Liabilities are obligations the entity must settle, divided into current liabilities due within a year and non-current liabilities with longer maturities. Equity represents the owners’ residual interest, including share capital, retained earnings, and other reserves.

Balance sheets are prepared at a point in time, under applicable accounting standards such as IFRS or national GAAP. They can be presented as a classified balance sheet with detailed line items or as a simpler form. The amounts reflect historical cost, fair value where permitted, and impairment adjustments, and are often complemented by notes describing accounting policies and contingencies.

The balance sheet is used by management, investors, lenders, and regulators to evaluate liquidity, leverage, and financial flexibility. Common analyses include current ratio, debt-to-equity ratio, and asset turnover. It complements the income statement and cash flow statement to provide a complete view of the entity’s financial performance and position.