Q. What is classified balance sheet?
The balance sheets we presented thus far have been unclassified balance sheets. An unclassified balance sheet has three major categories liabilities, assets and stockholders' equity. A classified balance sheet contains the similar three major categories and subdivides them to provide useful information for interpretation and analysis by users of financial statements. Exhibit 26 shows a somewhat revised classified balance sheet for The Home Depot Inc and subsidiaries. Prompt that The Home Depot classified balance sheet is in a vertical format assets appearing above liabilities and stockholders' equity rather than the horizontal format assets on the left and liabilities and stockholders' equity on the right. The two formats are uniformly acceptable. The Home Depot classify balance sheet subdivides two of its three major categories. The Home Depot subdivides its assets into property and equipment, long-term investments, long-term notes receivable, current assets, intangible assets (cost in excess of the fair value of net assets acquired) and other assets. The company subdivides its liabilities into long-term liabilities (including deferred income taxes) and current liabilities. A later chapter illustrate minority interest. Stockholders' equity is the similar in a classified balance sheet as in an unclassified balance sheet. Later sections describe further subdivisions of the stockholders' equity section.