Balance Sheet Format as per Schedule III, with Example and Excel

What does a balance sheet show?

A balance sheet is a snapshot of a business on one date, usually 31 March in India. It rests on one equation:

Assets = Liabilities + Capital (owners’ equity)

Everything the business has came from somewhere. Either the owners put the money in (capital, shares, profits left in the business) or outsiders did (bank loans, suppliers who haven’t been paid yet). That’s why the two sides always agree, and why a balance sheet that doesn’t tally always has a mistake in it somewhere.

The figures come from the closing balances in the ledger, which you first check with a trial balance. If you haven’t made one before, start with our trial balance format with an example. Every balance on it goes either to the profit and loss account or to the balance sheet. The year’s profit itself lands on the balance sheet too: a sole trader adds it to capital, and a company adds it to “Reserves and surplus”.

Which balance sheet format applies to you?

You don’t get to choose the format. It’s fixed by the type of entity:

Banks, insurance companies and electricity companies follow formats laid down by their own laws, which is why section 129 of the Companies Act keeps them out of Schedule III.

Balance sheet format as per Schedule III (vertical format)

This is the format most people mean when they search for “balance sheet format”. It’s the vertical format in Part I of Schedule III to the Companies Act, 2013, Division I. Every company that follows the Companies (Accounting Standards) Rules, 2006 must present its balance sheet this way. The headings and numbering below are copied from the current text of the Act, with every amendment up to March 2021:

Name of the Company: ________ · Balance Sheet as at ________ · (Rupees in ________)

The Act ends the format with one line: “See accompanying notes to the Financial Statements.” The balance sheet itself only shows totals. The detail goes into numbered notes, which is what the “Note No.” column points to.

What each heading means

Two ideas come up again and again. Current means due or usable within the next twelve months, and non-current means later than that. (A business whose cycle from buying to getting paid runs longer than a year, called the operating cycle, uses that cycle instead of twelve months. There’s more on this below.)

Students often mix up a provision and an outstanding expense. An outstanding expense is a known bill that hasn’t been paid yet, such as March rent, and it goes under other current liabilities. A provision is an estimate for a cost you expect but can’t pin down exactly, such as gratuity or this year’s income tax. If you’re also unsure where debtors and creditors fit, our explainer on the meaning of debtor and creditor covers it.

What changed in the new balance sheet format?

The new balance sheet format is Schedule III as amended by the Ministry of Corporate Affairs (MCA) in notification G.S.R. 207(E) of 24 March 2021, in force from 1 April 2021, so from financial year 2021-22. The main changes to the balance sheet and its notes:

• Current maturities of long-term borrowings now sit in short-term borrowings, shown separately in the note. They used to be under other current liabilities. The logic is simple: the instalments due in the next twelve months have to be paid within the year, so they are short-term debt.
• Shareholding of promoters: a new table in the share capital note shows each promoter’s shares, their percentage of the total, and the percentage change during the year.
• Ageing schedules for trade payables, trade receivables, capital work-in-progress and intangible assets under development. Payables and receivables are aged from the due date of payment, or from the transaction date where no due date was agreed. CWIP and intangibles under development are aged by how long the amount has been sitting there.
• Eleven ratios must be disclosed: current ratio, debt-equity, debt service coverage, return on equity, inventory turnover, trade receivables turnover, trade payables turnover, net capital turnover, net profit ratio, return on capital employed and return on investment. Any ratio that moves by more than 25% from the previous year needs an explanation.
• New regulatory disclosures, such as title deeds of property not held in the company’s name, proceedings under the Benami property law, being declared a wilful defaulter by a bank, dealings with companies struck off the register, and holdings of crypto currency.
• Renamed headings: “Fixed assets” was renamed “Property, Plant and Equipment” in 2018. The 2021 notification made it “Property, Plant and Equipment and Intangible assets” and renamed sub-head (i), “Tangible assets”, to “Property, Plant and Equipment”.
• Rounding off is now compulsory and linked to total income. A company with total income below ₹100 crore rounds to the nearest hundreds, thousands, lakhs or millions. At ₹100 crore or more, it rounds to lakhs, millions or crores. Whatever unit you pick must be used throughout.

A note for Class 12 students: the NCERT chapter “Financial Statements of a Company” (reprint 2026-27) still prints the older headings “Fixed assets: (i) Tangible assets”, doesn’t split trade payables into MSEs and others, and links rounding to turnover. In your board exam, follow the textbook and your teacher. For real company accounts, use the Schedule III wording on this page.

As of October 2026, the Act’s footnotes and ICAI’s guidance show no amendment to Division I after March 2021. If MCA notifies a change, we’ll update this page.

Balance sheet format with example

Here’s the format filled in for a small trading company, Example Traders Private Limited. The figures are made up for learning, but every total and note agrees with the others. Amounts are in ₹ thousands, a unit Schedule III allows when total income is below ₹100 crore. So “1,000” means 1,000 thousand, which is ₹10,00,000 (₹10 lakh).

Both sides total ₹5,240 thousand this year and ₹4,920 thousand last year. The previous-year column isn’t optional: Schedule III wants last year’s figures for every item, notes included, except in a company’s very first financial statements.

The notes behind the example

The balance sheet gives the totals; the notes give the detail. These are the notes the 2021 amendment added or changed.

Share capital (Note 2): authorised capital is 2,00,000 equity shares of ₹10 each, and 1,00,000 shares of ₹10 each are issued and fully paid up, which is ₹1,000 thousand. Reserves and surplus (Note 3) went from 1,120 to 1,460 because the year’s profit of 340 stayed in the business and no dividend was paid. The promoter table looks like this:

Borrowings (Notes 4 and 6): the company owes the bank 1,200 on a term loan. Of that, 300 is repayable in the next twelve months, so only 900 stays in long-term borrowings. The 300 moves to short-term borrowings, next to the cash credit limit:

Trade payables ageing (Note 7): of the 700 owed to suppliers, 180 is owed to micro and small enterprises, all of it less than a year past the due date. MSE dues are shown separately because the MSMED Act, 2006 protects small suppliers against late payment, and the government tracks such delays on its MSME Samadhaan portal. A disputed due is one the company doesn’t accept it owes, for example because the goods were defective. (MSME stands for micro, small and medium enterprises; the Schedule III payables line names only the micro and small ones, MSEs.)

Trade receivables ageing (Note 12): receivables use finer buckets, starting with “less than 6 months”. “Considered doubtful” means there’s a real chance the customer won’t pay.

Ratios: here are two of the eleven, worked out from the balance sheet above. The numerator and denominator are the top and bottom of the fraction.

The debt-equity ratio fell from 0.85 to 0.67, a drop of about 21% (0.85 − 0.67 = 0.18, and 0.18 ÷ 0.85 ≈ 21%), because the term loan is being repaid while profits add to reserves. That’s under the 25% limit, so no explanation is needed. A movement of more than 25% would need a line in the notes saying why.

How to decide current or non-current

This is where most classification mistakes happen. Schedule III treats an asset as current if any one of these is true:

1. it is expected to be realised, sold or consumed in the company’s normal operating cycle;
2. it is held mainly for trading;
3. it is expected to be realised within twelve months after the balance sheet date; or
4. it is cash or a cash equivalent that isn’t restricted for the next twelve months.

“Realised” here simply means turned into cash.

Everything else is non-current. Liabilities follow the same logic: a liability is current if it will be settled in the operating cycle or within twelve months, is held for trading, or the company has no unconditional right to put off payment beyond twelve months.

The operating cycle is the time between buying inputs and collecting cash from selling the output. For a trader it may be a couple of months; for a builder it can run for years. When it can’t be identified, Schedule III assumes twelve months. That’s why, for a builder, flats under construction are normally classified as inventory, a current asset, even if they’ll take three years to sell.

A tip for students: whenever a term loan appears, ask “how much of this is due in the next twelve months?” before you write anything. That one question fixes the most common error in company balance sheets.

Horizontal balance sheet format (T-form)

The horizontal format puts liabilities and capital on the left and assets on the right, side by side. It’s the format in the Class 11 NCERT chapter “Financial Statements – I”, and the one most sole traders and partnership firms still use. Here’s one for a sole proprietor, Riya Garments, with made-up figures in rupees:

Look at how the capital account works. The owner started the year with ₹5,00,000, the business earned a net profit of ₹1,20,000 and she took out ₹60,000 for personal use, leaving closing capital of ₹5,60,000. Drawings are always deducted. Adding them is one of the easiest marks to lose in an exam, so check that sign first.

The order of items is called marshalling. This example uses the order of permanence: the most permanent items (capital and fixed assets) come first and cash comes last. Many firms use the reverse, the order of liquidity, which starts with cash. Either is fine for a non-company, as long as you stick to one.

You’ll notice the older words here: sundry debtors, sundry creditors, fixed assets. Schedule III says trade receivables, trade payables and property, plant and equipment. They mean the same things.

Horizontal vs vertical balance sheet

Practice: from trial balance to balance sheet

This is the kind of question you’ll meet in Class 11, B.Com and accounts job tests. Here’s Riya Garments’ trial balance on 31 March 2026, before adjustments (made-up figures):

Adjustments:

1. Closing stock is valued at ₹2,10,000.
2. Depreciate machinery by ₹20,000 and furniture by ₹10,000.
3. Rent of ₹15,000 is outstanding.
4. Insurance of ₹5,000 is prepaid.

Try it yourself first. The answer is the Riya Garments balance sheet in the horizontal section above, so you can check your final figures against it. The trick is that every adjustment touches two places: once in the profit working and once on the balance sheet. Closing stock is added to the profit side and shown as an asset. Depreciation is charged as an expense and cuts the asset’s value: machinery ₹3,20,000 − ₹20,000 = ₹3,00,000, and furniture ₹1,60,000 − ₹10,000 = ₹1,50,000. Outstanding rent adds to the rent expense and appears as a liability. Prepaid insurance reduces the insurance expense and appears as an asset. The profit works out like this:

The net profit of ₹1,20,000 goes to capital, drawings come off, and every other balance moves to its heading. That gives the balance sheet shown in the horizontal section: closing capital of ₹5,60,000 (₹5,00,000 + ₹1,20,000 − ₹60,000), fixed assets of ₹4,50,000, current assets of ₹4,35,000, and ₹8,85,000 on both sides. If your answer is different, compare item by item; the gap is almost always one adjustment taken to only one place. The same problem is in the Excel template so you can work it there.

Balance sheet format for partnership firms and other non-corporate entities

A partnership firm’s balance sheet looks like the sole trader’s, except that each partner has a separate capital account and, where the partnership deed provides for one, a current account. Interest on capital, salary to partners and each partner’s share of profit are credited to these accounts, and drawings are debited. The Class 12 partnership chapters use this horizontal layout.

The bigger change is ICAI’s Guidance Note on Financial Statements of Non-Corporate Entities, issued in August 2023. It gives proprietorships, partnerships, HUFs, AOPs and similar entities a vertical format modelled on Schedule III. ICAI announced on 31 March 2026 that it applies in two phases:

• Phase I: accounting periods beginning on or after 1 April 2025, for entities whose turnover exceeds ₹5 crore.
• Phase II: accounting periods beginning on or after 1 April 2026, for all entities.

You may still come across an older ICAI FAQ that mentions 1 April 2024. The March 2026 announcement replaced that with the phases above.

The structure of the format, from ICAI’s illustrative Excel formats, is:

• I. Owners’ funds and liabilities
  • Owners’ funds: (a) owners’ capital account, split into (i) owners’/partners’ capital account and (ii) owners’/partners’ current account; (b) reserves and surplus.
  • Non-current liabilities: long-term borrowings, deferred tax liabilities (net), other long-term liabilities, long-term provisions.
  • Current liabilities: short-term borrowings, trade payables, other current liabilities, short-term provisions.
• II. Assets
  • Non-current assets: property, plant and equipment and intangible assets (with CWIP and intangibles under development), non-current investments, deferred tax assets (net), long-term loans and advances, other non-current assets.
  • Current assets: current investments, inventories, trade receivables, cash and bank balances, short-term loans and advances, other current assets.

The Excel template on this page has this layout on its own sheet. LLPs have a separate ICAI Guidance Note with the same phasing.

What about Ind AS companies (Division II)?

Companies that follow Ind AS use Division II of Schedule III. Under the Companies (Indian Accounting Standards) Rules, 2015, that covers listed companies (other than those listed on SME exchanges) and unlisted companies with a net worth of ₹250 crore or more, along with their holding, subsidiary, joint venture and associate companies (companies they control, are controlled by, or hold a major stake in). Other companies can choose to adopt Ind AS voluntarily. The idea is the same, but the layout differs:

• assets come first, then equity and liabilities;
• “Shareholders’ funds” becomes Equity, made up of equity share capital and other equity;
• financial assets and financial liabilities (investments, trade receivables, loans, borrowings, trade payables) get their own sub-headings;
• there are separate lines for goodwill, investment property, lease liabilities, and current tax assets and liabilities.

You’ll see this layout in the annual reports of listed companies, and B.Com students meet it in corporate accounting. For a small company’s books, Division I is the one you’ll use.

How to prepare a balance sheet, step by step

1. Close the books for the period. Post every voucher and reconcile the bank account; our bank reconciliation statement guide shows how.
2. Pass the adjustment entries: closing stock, depreciation, outstanding and prepaid expenses, accrued income, provisions and the tax provision. If the debits and credits trip you up, practise with these journal entries questions with answers.
3. Prepare the trial balance and make sure the debit and credit totals agree.
4. Prepare the profit and loss account (or trading and profit and loss account) to find the year’s profit.
5. Take each remaining balance to its heading: capital and reserves (including this year’s profit), borrowings, payables, fixed assets, inventory, receivables and cash.
6. Classify each item as current or non-current using the rule above, and split items such as term loans into their current and non-current parts.
7. Write the notes if it’s a company: share capital with promoter shareholding, borrowings, ageing schedules, PPE movement and ratios.
8. Check that both sides agree, then fill in the previous year’s figures.

Many small businesses keep their books in accounting software such as TallyPrime, which builds the balance sheet from the ledgers. Our list of TallyPrime shortcut keys covers moving around reports and exporting them to Excel. You still need to know the format, to check what the software shows and to prepare the Schedule III version for the auditor.

Free balance sheet format in Excel and PDF

Both files are free, with no sign-up:

• Balance sheet format Excel template (.xlsx): a blank Schedule III sheet with automatic totals and a “Balanced” check, the filled example, its notes, the horizontal sole-trader balance sheet, the practice problem, and the non-corporate vertical format.
• Balance sheet format PDF: the blank Schedule III format, the worked example with notes, and the horizontal format, ready to print.

In the Excel template, type only in the yellow cells. The totals add up by themselves, and the check row shows the difference if the two sides don’t match, which is the quickest way to find a missing entry. It works in Excel 2016 or later, and it also opens in Google Sheets. If you want to build reports like this yourself, start with these Excel formulas for accounting.

Common mistakes in balance sheet formats

• Using an old format: “Fixed assets / Tangible assets”, no MSE split in trade payables, or current maturities still under other current liabilities. Compare your headings with the Schedule III table above.
• Leaving the whole term loan in long-term borrowings when part of it is due within twelve months. Split it and show the current part under short-term borrowings.
• Mixing units, for example rupees in one note and lakhs in another. Schedule III wants one unit throughout.
• Treating goodwill or software as PPE. They’re intangible assets.
• Netting off: setting a supplier you’ve overpaid against your payables, or an overdraft against cash at bank. Show each under its own heading.
• Forgetting the previous year’s figures, or the ageing schedules and promoter table in a company’s notes.
• Taking an adjustment to only one place, for example charging depreciation in the profit and loss account but not reducing the asset.
• Adding drawings to capital instead of deducting them.

Learn to prepare final accounts with a trainer

The balance sheet is where all of bookkeeping comes together, and interviewers for accounts jobs often ask about it. Our list of accounting interview questions includes balance sheet questions for freshers. If you’d rather learn it hands-on, IPA’s Advanced Diploma in Financial Accounting (ADFA) in Laxmi Nagar, Delhi covers vouchers, ledgers, bank reconciliation, the trading and profit and loss account and the balance sheet, then TallyPrime, BUSY, GST, TDS and payroll.

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