Classification and Terminology of Individual Balance-Sheet Items.

Abstract The article focuses on the classification of individual items in the balance sheet and the relevant terminology's used. The study reported in this article is based on the analysis of 587 balance sheets contained in the annual reports to stockholders of all the industrial companies having common or preferred stocks listed in the New York stock exchange. Some of the terms being discussed are—inventories, tangible fixed assets, intangible fixed assets, etc. In 390 out of 570 statements having inventories, no classification of content of inventories was shown. A single amount was being used for all the inventories. All the tangible fixed assets were combined in one amount in 323 statements. In the remaining balance sheets, where the tangible fixed assets were broken down into two or more items, there were 131 instances where the values of land and buildings were combined, making a total of 454 statements in which the value of the land was included with other values. This represents 78.5% of the balance sheets in which land was mentioned as one of the assets.