An accounting statement which provides a snapshot of the financial picture of a business on a given day. The balance sheet lists the assets of the company, including long-term assets, such as buildings, plant and equipment and goodwill, as well as short-term assets, such as debtors and cash. The balance sheet then lists liabilities, both long-term and short-term. In a company's balance sheet, the assets less the liabilities equal the shareholders' equity, which is a residual and which is broken down into share capital and other reserves.

The balance sheet must give a true and fair view of the assets, liabilities and equity of the company at the financial year end date (section 396, Companies Act 2006).

The balance sheet (which in accounting standards is often called the statement of financial position), along with the profit and loss account, is an important tool for analysing the financial health of a company.

For further details, see Practice note, Financial statements: Companies Act 2006 requirements.