What is the Difference Between Bank Balance Sheet and Company Balance Sheet?

The main difference between a bank balance sheet and a company balance sheet lies in the assets and liabilities they contain. Here are the key differences:

• Company Balance Sheet: A company's balance sheet typically includes assets such as inventory, property, plant, and equipment, and liabilities such as accounts payable and loans. It is prepared according to the regulations of the International Accounting Standards.
• Bank Balance Sheet: A bank's balance sheet focuses on assets like loans and investments, and liabilities like deposits and borrowings. It is prepared as per the mandate by the Regulatory Authorities. Additionally, banks have additional sections in their balance sheet, such as 'Capital' and 'Reserves,' and need to maintain a certain level of reserves as per central bank regulations.

Despite these differences, both balance sheets serve a similar purpose: to provide an accurate picture of the organization's financial affairs. Some common elements between the two include the equity section, which shows the residual interest in the assets of the entity after deducting liabilities.

Comparative Table: Bank Balance Sheet vs Company Balance Sheet

The main differences between a bank balance sheet and a company balance sheet are the nature of their assets, liabilities, and the purpose of the balance sheet. Here is a comparison table highlighting the key differences:

In summary, a bank's balance sheet primarily consists of assets like loans, securities, and cash, and liabilities such as deposits and borrowings. On the other hand, a company's balance sheet includes assets like current assets, investments, plant & machinery, and intangible assets, and liabilities like current liabilities and long-term liabilities. The purpose of a bank's balance sheet is to showcase the trade-off between profit and risk, while a company's balance sheet provides a snapshot of its financial position at a specific point in time.