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Publication date: 30 Sep 2022
us Financial statement presentation guide
ASC 205, Presentation of Financial Statements, and ASC 210, Balance Sheet, provide authoritative guidance for presentation of the balance sheet for all US GAAP reporting entities. These rules closely align with SEC regulations, except for certain circ*mstances in which the SEC prescribes incremental requirements.
Commercial and industrial companies that are SEC registrants are generally subject toS-X Article 5, and should also comply with the guidance regarding presentation of the balance sheet in SAB Topic 11.E (codified in ASC 205-10-S99-9)and Article 3 and Article 4 within Regulation S-X:
- S-X Article 5 provides for the presentation of the balance sheet and notes additional schedules that may be required.
- SAB Topic 11.E provides guidance on the chronological ordering of financial data.
- Article 3 provides general instructions applicable to all registrants. In particular, S-X 3-01 stipulates that the registrant and its subsidiaries should file a consolidated balance sheet as of the end of each of the two most recent fiscal years.
- Article 4 (S-X 4-01 through S-X 4-03) provides general application rules regarding the form and order of the balance sheet and other statements.
Reporting entities subject to other SEC regulations include registered investment companies and business development companies (Article 6), employee stock purchase, savings and similar plans (Article 6A), insurance companies (Article 7), smaller reporting companies (Article 8), bank holding companies (Article 9), and brokers and dealers when filing Form X-17A-5. While Article 5 requires a classified balance sheet, no other articles within S-X contain this requirement. Reporting entities subject to the articlesreferred to aboveshould refer to the applicable S-X guidance to determine their requirements.
2.2.1 Sample balance sheets
FigureFSP 2-1 is an illustrative balance sheet prepared based on the following conventions:
- Captions not required by SEC rules, but either required by US GAAP or often included in a typical presentation are in regular font.
- Captions required by S-X 5-02 are in bold font.
- If S-X 5-02 provides an option to include information in a footnote rather than on the face of the balance sheet, the caption is in regular font.
Detailed presentation and disclosure requirements are addressed in FSP 2.3.3. For each balance sheet caption, the last column of FigureFSP2-1 includes a reference to the relevant FSP guide chapter where more information can be found. The captions included on a balance sheet may vary based on each reporting entity's facts. Further, certain required captions may not be applicable to all reporting entities.
Figure FSP 2-1
Sample consolidated balance sheets under S-X 5-02
FSP Corp | ||||
Assets | December 31, 20X2 | December 31, 20X1 | FSP guide chapter reference | |
(in millions $, except per share data) | (in millions $, except per share data) | |||
Current assets | ||||
Cash and cash equivalents | $ xxx | $ xxx | FSP 6.5 | |
Restricted cash | xxx | xxx | FSP 6.5 | |
Marketable securities at fair value (amortized cost of $xxx in 20X2 and $xxx in 20X1) | xxx | xxx | FSP 9.4 | |
Accountsreceivable , net of allowance for doubtful accounts of $xx and $xx | xxx | xxx | FSP 8.3 | |
Notes receivable , net of allowance for doubtful accounts of $xx and $xx | xxx | xxx | FSP 8.3 | |
Net investment in leased property | xxx | xxx | FSP 14.4A | |
Inventories | xxx | xxx | FSP 8.4 | |
Prepaid expenses | xxx | xxx | FSP 8.5 | |
Contract assets | xxx | xxx | FSP 33.3 | |
Other current assets | xxx | xxx | FSP 8 | |
Total current assets | xxx | xxx | ||
Debt and equity securities | xxx | xxx | FSP 9.4 | |
Securities of related parties | xxx | xxx | FSP 26.3 | |
Net investment in leased property, noncurrent | xxx | xxx | FSP 14.4A | |
Indebtedness of related parties, noncurrent | xxx | xxx | FSP 26.3 | |
Other investments | xxx | xxx | FSP 9.4 | |
Investments in unconsolidated subsidiaries | xxx | xxx | FSP 10.3 | |
Derivative assets | xxx | xxx | FSP 19.3 | |
Deferred income tax assets, noncurrent | xxx | xxx | FSP 16.3 | |
Property, plant, and equipment, net of accumulated depreciation, depletion, and amortization of $xx and $xx | xxx | xxx | FSP 8.6 | |
Intangible assets, net of accumulated amortization of $xx and $xx | xxx | xxx | FSP 8.8 | |
Goodwill | xxx | xxx | FSP 8.9 | |
Other assets | xxx | xxx | FSP 8 | |
Total assets | $ xxx | $ xxx | ||
Liabilities, redeemable preferred stock, and stockholders’ equity | December 31, 20X2 | December 31, 20X1 | FSP guide chapter reference | ||
(in millions $, except per share data) | (in millions $, except per share data) | ||||
Current liabilities | |||||
Accounts and notes payable | $ xxx | $ xxx | FSP 11.3 | ||
Current portion of long-term debt | xxx | xxx | FSP 12 | ||
Current portion of obligations under capital leases | xxx | xxx | FSP 14.3A | ||
Income taxes | xxx | xxx | FSP 16.3 | ||
Derivative liabilities | xxx | xxx | FSP 19.3 | ||
Deferred credits, current | xxx | xxx | FSP 16.4 | ||
Dividends payable | xxx | xxx | FSP 5.11 | ||
Contract liabilities | xxx | xxx | FSP 33.3 | ||
Other current liabilities | xxx | xxx | FSP 11 | ||
Total current liabilities | xxx | xxx | |||
Bonds, mortgages and other long-term debt, including capitalized leases | xxx | xxx | FSP 12/FSP 14 | ||
Indebtedness to related parties – noncurrent | xxx | xxx | FSP 26.3 | ||
Noncurrent portion of obligations under capital leases | xxx | xxx | FSP 14.3A | ||
Notes payable, noncurrent | xxx | xxx | FSP 11 | ||
Long-term debt | xxx | xxx | FSP 12 | ||
Employee benefit plan obligation | xxx | xxx | FSP 13 | ||
Deferred credits, noncurrent | xxx | xxx | FSP 16.3 | ||
Deferred tax liabilities, noncurrent | xxx | xxx | FSP 16.3 | ||
Other liabilities | xxx | xxx | FSP 11 | ||
Total liabilities | xxx | xxx | |||
Commitments and contingent liabilities | FSP 23 | ||||
Redeemable preferred stock Class D - subject to redemption ($0.01 par value; authorized – xxxx shares; issued and outstanding – xxx and xxx shares) | xxx | xxx | FSP 5.6.3 | ||
Stockholders’ equity | |||||
Non-redeemable preferred stock Class C ($0.01 par value; authorized – xxxx shares; issued and outstanding – xxx and xxx shares) | xxx | xxx | FSP 5.6 | ||
Common stock – Class A ($0.01 par value; authorized – xxxx shares; issued and outstanding – xxx and xxx shares) | xxx | xxx | FSP 5.5 | ||
Treasury stock, at cost (xxx and xxx shares held) | (xxx) | (xxx) | FSP 5.9 | ||
Additional paid-in capital | xxx | xxx | FSP 5.10 | ||
Accumulated other comprehensive income | xxx | xxx | FSP 4 | ||
Retained earnings | xxx | xxx | FSP 5.8 | ||
Total stockholders’ equity attributable to FSP Corp stockholders | xxx | xxx | |||
Noncontrolling interests in consolidated subsidiaries | xxx | xxx | FSP 5.3.1/ | ||
Total stockholders’ equity | xxx | xxx | |||
Total liabilities, redeemable preferred stock, and equity | $ xxx | $ xxx | |||
See Notes to the Consolidated Financial Statements
1 S-X 5-02(1) requires segregation on the balance sheet of funds legally restricted as to withdrawal, including compensating balances. The provisions of any restrictions should be described in a note to the financial statements.
2 ASC 825-10-45-1A requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or in the footnotes. See FSP 9.4.
3 The caption in S-X 5-02 is “accounts and notes receivable.” This balance sheet assumes that each account is material and is included individually. S-X 5-02 requires separate captions for amounts receivable from (1) customers (trade), (2) related parties, (3) underwriters, promoters, and employees (other than related parties) that arose in other than the ordinary course of business, and (4) others.
4 S-X 5-02 permits allowances to be set forth separately on the balance sheet or in a note. ASC 210-10-45-13 requires allowances to be deducted from the asset group to which they relate.
5 If leasing is a significant part of the lessor’s business activities (as measured by revenue, net income, or assets), the lessor should disclose the components that make up its net investment in sales-type or direct financing leases under ASC 840. See FSP 14.4.3.2A for more details. See LG 9.3 for presentation and disclosure requirements for a lessor under ASC 842.
6 S-X 5-02 requires separate captions for (1) deferred income taxes, (2) deferred tax credits, and (3) material items of deferred income. ASC 740 requires a reporting entity to net all deferred tax assets and liabilities bytax paying component for eachjurisdiction, along with any related valuation allowance, and classify eachtax paying component’s net deferred tax balanceas noncurrent.
7 S-X 5-02(14) requires the amount of accumulated depreciation, depletion, and amortization of property, plant, and equipment to be presented separately in the balance sheet or in a note. Per ASC 840-30-50-1(a) assets recorded under capital leases may be combined with owned assets, and are often included in the Property, Plant, and Equipment line item. Refer FSP 14.1 for the ASC 842 presentation and disclosure requirements.
8 Caption required by ASC 350-20-45-1.
9 The caption in S-X 5-02 is "accounts and notes payable." This balance sheet assumes that each account is material and is included individually. S-X 5-02 does require separate captions for amounts payable to (1) banks for borrowings; (2) factors or other financial institutions for borrowings; (3) holders of commercial paper; (4) trade creditors; (5) related parties; (6) underwriters, promoters, and employees (other than related parties); and (7) others. Amounts applicable to (1), (2), and (3) may be stated separately on the balance sheet or in a footnote.
10 Required to be a separate caption, even without a dollar amount, if the reporting entity includes a footnote describing commitments and contingencies. See FSP 23.
11 If applicable, S-X 5-02 requires separate presentation for each issue of redeemable preferred stock (also known as "mezzanine equity" or temporary equity). Determining whether certain instruments are required to be classified as mezzanine equity is discussed in FG 7 and presentation and disclosure of mezzanine equity is discussed in FSP 5.6.3.1.
12 In accordance with S-X 5-02, additional paid-in capital may be combined with the stock caption to which it applies, if appropriate.
13 Caption required by S-X 5-02 and ASC 220-10-45-14.
14 S-X 5-02 requires separate captions for (1) appropriated and (2) unappropriated retained earnings.
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