Balance Sheet = Non-Current Area + Current Area

Assets which generally get liquidated and liabilities which generally get cleared within a time span of a year or less are classified as current natured and are identified as current assets and current liabilities respectively.

Thus, the current area of the balance sheet is made up of the current assets on the assets side and the current liabilities on the liabilities side.

Balance Sheet of M/s Free Flow Fluids as on 30th June 2007
Liabilities	Amount	Assets	Amount
... CURRENT LIABILITIES AND PROVISIONS (1) Sundry Creditors (2) Bills Payable (3) Bank Overdraft (4) Outstanding Expenses (5) Unclaimed Dividends (6) Pre received Incomes (7) Provision for Taxation (8) Provision for Dividends	... 13,00,000 12,00,000 5,00,000 5,00,000 20,000 2,23,000 3,00,000 4,00,000  44,43,000	... CURRENT ASSETS A. LIQUID ASSETS (1) Cash balance on hand (2) Bank Balance (3) Bills Receivable (4) Sundry Debtors   Less: Reserve for   Doubtful Debts (5) Advances recoverable in cash       or for value to be received B. OTHER CURRENT ASSETS (1) Stocks/Inventories (2) Prepaid Expenses (3) Incomes Receivable (4) Short Term Investments	... 1,17,000 – 15,00,000 38,20,000 3,83,000 6,00,000 3,80,000 1,60,000 5,00,000 72,60,000
	2,38,36,000		2,38,36,000

Current Assets > Current Liabilities

In general, the aggregate value of current assets would be greater than the aggregate value of current liabilities. This is not a rule and need not be so always.

From the above balance sheet,

• aggregate of Current Assets = 72,60,000
• aggregate of Current Liabilities = 44,43,000

Assets which generally have a life span of more than one year and liabilities which generally get cleared over a long period of time (greater than one year) are classified as non-current natured and are identified as non-current assets and non-current liabilities respectively.

With a few exclusions, we can also say that assets other than current assets are non-current assets and liabilities other than current liabilities are non-current liabilities.

Thus, the non-current area of the balance sheet is made up of the non-current assets on the assets side and the non-current liabilities on the liabilities side.

Balance Sheet of M/s Free Flow Fluids as on 30th June 2007
Liabilities	Amount	Assets	Amount
EQUITY SHARE CAPITAL PREFERENCE SHARE CAPITAL RESERVES a) P/L Appropriation a/c     (Retained Earnings) b) Share Premium c) Shares Forfeited d) Capital Redemption Reserve e) General Reserve LONG TERM LIABILITIES (1) Loans from Banks (2) Debentures (3) Fixed Deposits Collected ...	15,00,000 9,00,000 29,57,000 14,00,000 1,74,000 12,00,000 20,00,000 54,00,000 25,00,000 14,62,000 1,93,93,000  ...	FIXED ASSETS Goodwill at cost Land and Buildings Plant and Machinery Furniture and Fittings Loose Tools Patents, Trade Marks, Copyrights Investments ACCUMULATED LOSSES Miscellaneous Expenses Goodwill (Self Generated) Patents, Trade Marks, Copyrights     (unrealisable) Discount on issue of     shares and Debentures ...	8,00,000 62,00,000 35,00,000 5,00,000 4,26,000 18,00,000 24,00,000 2,40,000 2,00,000 1,00,000 2,10,000 1,65,76,000  ...
	2,38,36,000		2,38,36,000

Non-Current Liabilities > Non-Current Assets