neraca

Neraca, in accounting often translated as the balance sheet, is a financial statement that presents an entity’s financial position at a specific date. It lists what the entity owns (assets), what it owes (liabilities), and the owners’ residual interest (equity). The core accounting equation—Assets equal Liabilities plus Equity—underpins the neraca.

Purpose and use: The neraca provides information about liquidity, solvency, and the capital structure of an organization. It helps users assess the entity’s ability to meet short-term obligations and how its assets are financed.

Structure: A typical neraca classifies items into assets and liabilities plus equity. Assets are commonly divided into current assets (expected to be converted to cash or used within one year) and non-current assets. Liabilities are split into current liabilities (due within one year) and non-current liabilities. Equity covers contributed capital, retained earnings, and other components reflecting owners’ claims. The total assets must equal the total liabilities plus equity.

Format and preparation: The neraca is prepared as of a specific date, usually at the end of an accounting period. Many organizations present a classified balance sheet that highlights subtotals for each category, aiding comparison over time and with other entities. Values are typically based on historical cost, with certain items measured at fair value or other revaluation methods under applicable accounting standards.

Relation to other statements: The neraca complements the income statement, which covers performance over a period, and the cash flow statement, which details cash movements. Together, these statements form the core of financial reporting under frameworks such as IFRS and GAAP. In Indonesian practice, the neraca is a central element of annual and interim financial reporting.