Balance Sheet

What is this page about: Light generates balance sheets from the ledger for any entity, date, or currency. This page explains what a balance sheet is, how the three sections (assets, liabilities, equity) are structured, how to generate and read a balance sheet in Light, what each account means, how to analyze the balance sheet with ratios, how multi-entity and multi-currency reporting work, where to find fixed asset and deferred tax detail, and how to export balance sheet data.

# On this page

• What is a balance sheet?
• What accounts appear on a balance sheet?
• How do I generate a balance sheet in Light?
• What does each balance sheet account mean?
• How do I analyze a balance sheet?
• How do I compare balance sheets across periods?
• How do multi-entity balance sheets work?
• How do multi-currency balance sheets work?
• Where is the fixed asset register?
• How are deferred taxes shown on the balance sheet?
• What doesn't appear on the balance sheet?
• What goes in balance sheet footnotes?
• How often should I generate a balance sheet?
• How do I export balance sheet data?
• Frequently Asked Questions

Quick answer: A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a single point in time, following the equation Assets = Liabilities + Equity. In Light, you generate a balance sheet from Planning & Reports → Reports by choosing an as-of date, one or more entities, and a currency. The report renders automatically, there's no separate "Generate" step.

Light builds every report straight from the ledger, so the numbers you see are live, not a cached snapshot someone ran earlier. Change a filter and the balance sheet updates in place. Click any account and you're looking at the actual transactions behind it, not a summary that stops short of the detail.

# What is a balance sheet?

A balance sheet is a snapshot of a company's financial position as of a specific date. It reports three things:

• Assets, what the company owns
• Liabilities, what the company owes
• Equity, the owners' stake in the company

The balance sheet always balances: Total Assets = Total Liabilities + Total Equity. It's used for credit analysis, investor evaluation, and regulatory compliance, and is also called the statement of financial position or statement of financial condition.

# What accounts appear on a balance sheet?

The balance sheet groups accounts into three sections. Each section splits into current (within 12 months) and non-current (beyond 12 months) items where relevant.

Assets (what you own):

Liabilities (what you owe):

Equity (owners' stake):

• Share capital: amount invested by shareholders
• Retained earnings: accumulated profits not distributed as dividends
• Other comprehensive income: unrealized gains/losses on certain items

# How do I generate a balance sheet in Light?

1. Navigate to Planning & Reports → Reports.
2. Select the as-of date. The balance sheet is a snapshot report, so it shows balances as of that exact date.
3. Select the entities to include, either a single entity or a consolidated group.
4. Select the currency, either Entity Crcy (local currency) or Group Crcy (group currency).

The report updates automatically as you change any of these filters. Light displays the balance sheet, organized by asset, liability, and equity classification, as soon as your filters are set — no separate button to click to run the report.

Good to know: Light automatically leaves out accounts with no balance as of your selected date, so the balance sheet shows only lines with a value. Section headings, subtotals, and totals always appear.

# What does each balance sheet account mean?

# How do I analyze a balance sheet?

Four ratios, derived directly from balance sheet figures, are commonly used to assess financial health:

• Current ratio = Current Assets ÷ Current Liabilities. Shows your ability to pay short-term obligations. A ratio above 1 means you have more current assets than current liabilities.
• Quick ratio = (Current Assets − Inventory) ÷ Current Liabilities. A stricter version of the current ratio that excludes inventory, which is less liquid.
• Debt-to-equity ratio = Total Liabilities ÷ Total Equity. Higher ratios mean more leverage and more financial risk.
• Return on assets (ROA) = Net Income ÷ Average Total Assets. Measures how efficiently assets are used to generate profit.

To build any of these as a report line, use the PERCENT formula in a custom table report, which divides one set of report lines by another. See Custom reports and filters for details.

# How do I compare balance sheets across periods?

1. Navigate to Planning & Reports → Reports.
2. Use the Comparison filter to add a prior period, choosing 1, 3, 6, 9, or 12 months back, or a prior year, choosing 1, 2, or 3 years back.
3. Light displays the current and prior periods side-by-side.
4. Click any account to drill into the underlying transactions.

This view makes it easy to spot significant balance sheet movements that need investigation.

# How do multi-entity balance sheets work?

If your organization has multiple entities, Light lets you:

• Generate an entity-level balance sheet for each subsidiary or division
• Generate a consolidated balance sheet that combines all entities
• View inter-company balances, which are eliminated in consolidated reporting
• Analyze the balance sheet by entity type or geographic region

How eliminations work: Consolidated reporting pulls eliminations from a dedicated elimination ledger. When you post an inter-company document that's set up for elimination, Light automatically generates the offsetting entries in that ledger and includes them the next time it builds the consolidated report. This happens at posting time, there's no separate manual step to run.

# How do multi-currency balance sheets work?

1. Navigate to Planning & Reports → Reports.
2. Select Currency: Entity Crcy (local currency) or Group Crcy (group currency).
3. Light displays all amounts in your selected currency.

For companies with subsidiaries in different currencies:

• Entity Crcy shows an entity's balance sheet in its own functional currency. If the selected entities have different local currencies, the currency selector shows an error ("Selected entities have different currencies") and the report won't generate in that view — switch to Group Crcy to combine them.
• Group Crcy translates all entities into the group currency, as required for consolidation. Group-currency amounts are recorded on each transaction line when it's posted, adjusted by any FX revaluations you run — so consolidated balances stay consistent with your ledger rather than being re-translated on the fly.

# Where is the fixed asset register?

The balance sheet's fixed asset section shows a summary net of accumulated depreciation. For the per-asset detail behind that number, the fixed asset register:

1. Navigate to Accounting → Releases.
2. Filter by Fixed asset type.
3. Each row shows cost, accumulated depreciation, and remaining book value.
4. Open a row to see its depreciation schedule, method, and remaining useful life.

Fixed assets are created by applying a Fixed asset release template to a journal entry, bill, or sales invoice line. You set up these templates under Settings → Records → Releases templates. See Configuring releases for setup steps. This register supports asset management and replacement planning.

# How are deferred taxes shown on the balance sheet?

If your company recognizes deferred taxes, standard practice is to:

1. Calculate deferred tax assets, future tax benefits from deductions.
2. Calculate deferred tax liabilities, future tax payments owed.
3. Show the net deferred tax position on the balance sheet.
4. Maintain detailed schedules of the underlying timing differences.

Configure deferred tax accounts in your chart of accounts, then post the deferred tax adjustments yourself as journal entries — Light doesn't calculate any of this for you.

# What doesn't appear on the balance sheet?

Some obligations require disclosure even though they don't appear as balance sheet line items:

• Operating leases, before adopting IFRS 16/ASC 842, which brought them on-balance-sheet
• Contingent liabilities, possible but not probable obligations
• Commitments, contractual obligations not yet incurred

Document these in balance sheet footnotes and supplementary schedules.

# What goes in balance sheet footnotes?

A complete balance sheet reporting package includes footnotes covering:

1. Accounting policies, valuation methods and depreciation policies
2. Significant estimates, judgments used in calculating allowances and reserves
3. Contingencies, potential liabilities or assets
4. Subsequent events, items occurring after the balance sheet date
5. Commitments, contractual obligations

Prepare footnotes outside Light, as part of your financial statement package, using exported report data to support the underlying schedules.

# How often should I generate a balance sheet?

Light maintains all historical balances, so you can generate a balance sheet at any frequency:

• Monthly, for management analysis and trend identification
• Quarterly, for investor reporting and SEC compliance, if you're a public company
• Annual, for audited financial statements and regulatory filings

Tip: Always report balance sheets as of month-end or quarter-end dates. Mid-month balance sheets aren't reliable, since transaction processing may still be incomplete.

# How do I export balance sheet data?

1. Generate the balance sheet report.
2. Click the export button.
3. Light downloads a CSV file containing all rows and columns exactly as displayed.

Open the CSV in Excel or Google Sheets for further formatting and distribution. Drilldown transaction lines can also be exported as CSV.

# Frequently asked questions

Is there a "Generate" button for the balance sheet report?

No. The report renders automatically as soon as you set an as-of date, entities, and currency, and updates live as you change any filter.

Does Light automatically eliminate inter-company balances?

Eliminations are generated automatically, but only for inter-company documents that are set up for elimination. When you post one of those documents, Light writes the offsetting entries to the elimination ledger and includes them in the next consolidated report.

Does Light calculate the allowance for doubtful accounts or apply lower-of-cost-or-market to inventory?

No. These are standard accounting conventions you implement through how you set up and manage your chart of accounts. Light doesn't calculate them automatically.

What happens if I select Entity Crcy for entities with different local currencies?

The currency selector shows an error ("Selected entities have different currencies") and the report won't generate in that view, since there's no single local currency to display across entities that don't share one. Switch to Group Crcy to combine them.

What comparison periods are available for balance sheet trend analysis?

• Months: 1, 3, 6, 9, or 12 months back
• Years: 1, 2, or 3 years back

What format does the balance sheet export come in?

A CSV file containing all rows and columns exactly as displayed. Drilldown transaction lines can also be exported as CSV.

# Related articles

• Reporting overview
• Profit and loss
• Cash flow statement
• Trial balance
• Custom reports and filters