AccountsISC Class 12 · Final Accounts of Companies

Assets Side of a Company Balance Sheet and Notes: ISC Class 12 Accounts

Updated 17 October 2026 · Draft, not yet fact-checked

The assets side of a company Balance Sheet (Schedule III Part I) has two main heads. Non-Current Assets hold Property, Plant and Equipment and Intangible Assets, Non-current Investments, Long-term Loans and Advances and Other Non-current Assets. Current Assets hold Current Investments, Inventories, Trade Receivables, Cash and Cash Equivalents, Short-term Loans and Advances and Other Current Assets.

Note the two main heads: PPE and Intangibles now replace Fixed Assets, and current assets run from investments down to cash and loans.

Illustration drawn for QuestionBuddy.

Understand Company Balance Sheet: Assets Side and Notes to Accounts

What changed in the syllabus. The ISC syllabus records two amendments to this side. The sub-head "Fixed Assets" under Non-Current Assets is replaced by Property, Plant and Equipment and Intangible Assets, and "Tangible Assets" under it is replaced by Property, Plant and Equipment.

II. Assets: the layout

Main head	Sub-heads
1. Non-Current Assets	(a) Property, Plant and Equipment and Intangible Assets: (i) Property, Plant and Equipment (ii) Intangible Assets (iii) Capital work-in-progress (iv) Intangible assets under development; (b) Non-current Investments; (c) Long-term Loans and Advances; (d) Other Non-current Assets
2. Current Assets	(a) Current Investments; (b) Inventories; (c) Trade Receivables; (d) Cash and Cash Equivalents; (e) Short-term Loans and Advances; (f) Other Current Assets

Property, Plant and Equipment (PPE) are the physical assets used in business for more than one year: land, buildings, plant and machinery, furniture, vehicles, computers. Each is shown at cost less accumulated depreciation, so the Balance Sheet shows the net (book) value. A note gives the gross figure, the depreciation and the net.

Intangible assets have no physical form: goodwill, patents, trademarks, copyrights, software. They are shown at cost less amounts written off (amortisation). Amortisation is a non-cash charge, exactly like depreciation.

Non-current investments are held for more than a year. The syllabus rule on investments applies again: treat investments as non-trade unless the question says trade.

Long-term loans and advances are loans or advances recoverable after twelve months, such as a staff advance recoverable in two years.

Inventories include raw materials, work-in-progress, finished goods, stock-in-trade, stores and spares and loose tools. Trade receivables are debtors and bills receivable, shown after deducting the provision for doubtful debts (a note gives the gross figure and the provision).

Cash and cash equivalents cover cash in hand and balances with banks. Other Current Assets is restricted in the ISC syllabus to prepaid expenses and accrued income. Short-term loans and advances are amounts recoverable within twelve months, for example an advance to a supplier.

Capital losses. Under the syllabus limit, losses such as preliminary expenses are written off in the year they occur unless the question says otherwise, so they do not form an asset.

Notes to accounts. Every figure that needs a build-up carries a Note No.: Share Capital, Reserves and Surplus, PPE, Inventories, Trade Receivables, Cash and Cash Equivalents. Contingent liabilities (including proposed dividend) are also noted. The note must add up to the figure in the Balance Sheet.

The liabilities side is on the previous topic page, and complete preparation with adjustments is on the next.

Company Balance Sheet: Assets Side and Notes to Accounts: key facts

Two main heads of assets: Non-Current Assets | Current Assets; Schedule III Part I.
Net block of an asset: Cost
less Accumulated depreciation or amortisation
equals Book value shown; For PPE and intangibles.
Trade Receivables: Debtors + Bills receivable
less Provision for doubtful debts
equals Trade Receivables shown; Shown net, as the ratio chapter also assumes.
Cash and Cash Equivalents: Cash in hand
Balances with banks
Cheques and drafts in hand; Short-term investments are shown separately in the Balance Sheet.
Other Current Assets (ISC): Prepaid expenses | Accrued income; Syllabus restriction.
Total assets: Non-Current Assets + Current Assets | equals Total Equity and Liabilities; The two sides must agree.

How to answer Company Balance Sheet: Assets Side and Notes to Accounts questions

Sort every asset by two tests: is it physical or not, and will it be used or turned into cash within twelve months.

1Fixed physical assets: PPE at net value; fixed intangibles: Intangible Assets at net value.
2Investments and loans due beyond twelve months go to Non-Current Assets.
3Stock, debtors, cash and prepaid items go to Current Assets under their sub-heads.
4Deduct provision for doubtful debts from receivables; deduct accumulated depreciation from cost.
5Add each head, then both totals, and agree with the liabilities side.

Company Balance Sheet: Assets Side and Notes to Accounts in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Net book value and reading the note

Suppose a printing company bought a press for ₹6,00,000, and its accumulated depreciation is ₹2,40,000. The company also owns a trademark carried at ₹80,000 after write-offs.

What would the Balance Sheet show under PPE and under Intangible Assets, taking only these two assets?

Try it first, then show the solutionSolution

PPE: 6,00,000 − 2,40,000 = ₹3,60,000.
Intangible Assets: ₹80,000.
Together the sub-head shows 3,60,000 + 80,000 = ₹4,40,000.

Answer: PPE ₹3,60,000, Intangible Assets ₹80,000, together ₹4,40,000.

Memory hook: The Balance Sheet shows what is left to use, not what was paid.

Tricks to remember Company Balance Sheet: Assets Side and Notes to Accounts

Short memory aids. Say each one aloud once, then use it on a question the same day.

P-I-C-I
PPE, Intangibles, Capital WIP, Intangibles under development: the four items inside the first sub-head.
Use it when: Non-Current Assets.
I-T-C-S-O
Inventories, Trade receivables, Cash, Short-term loans, Other: current assets after investments.
Use it when: Current Assets order.
Prepaid and accrued only
Other Current Assets means prepaid and accrued, in ISC questions.
Use it when: Placing small items.

Company Balance Sheet: Assets Side and Notes to Accounts: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Placing prepaid insurance · 1 mark · MCQBoard level

Prepaid insurance in the Balance Sheet of a company is shown under:
(a) Cash and Cash Equivalents
(b) Short-term Loans and Advances
(c) Other Current Assets
(d) Inventories

Try it first, then show the solutionSolution

Prepaid expenses are the item the ISC syllabus assigns to Other Current Assets.

Answer: (c) Other Current Assets

Example 2: Classify the assets · 3 marks · Short answerBoard level

Under which head and sub-head will each appear? (i) Patents; (ii) Plant and machinery; (iii) Shares in another company held as a long-term non-trade investment; (iv) Stores and spares; (v) Bills receivable; (vi) Balance with bank; (vii) Staff advance recoverable after 2 years; (viii) Accrued interest. (3 marks)

Try it first, then show the solutionSolution

(i) Non-Current: PPE and Intangible Assets, Intangible Assets.
(ii) Non-Current: PPE.
(iii) Non-Current: Non-current Investments.
(iv) Current: Inventories.
(v) Current: Trade Receivables.
(vi) Current: Cash and Cash Equivalents.
(vii) Non-Current: Long-term Loans and Advances.
(viii) Current: Other Current Assets.

Answer: (i) NCA: Intangible Assets; (ii) NCA: PPE; (iii) NCA: Non-current Investments; (iv) CA: Inventories; (v) CA: Trade Receivables; (vi) CA: Cash and Cash Equivalents; (vii) NCA: Long-term Loans and Advances; (viii) CA: Other Current Assets.

Example 3: PPE and intangibles note · 3 marks · Short answerHarder board level

Prepare the Note on Property, Plant and Equipment and Intangible Assets from: Land ₹6,00,000; Building at cost ₹10,00,000 (accumulated depreciation ₹2,50,000); Machinery at cost ₹8,00,000 (accumulated depreciation ₹3,20,000); Furniture at cost ₹2,00,000 (accumulated depreciation ₹80,000); Patents (net of write-off) ₹1,50,000. (3 marks)

Try it first, then show the solutionSolution

Building = 10,00,000 − 2,50,000 = ₹7,50,000.
Machinery = 8,00,000 − 3,20,000 = ₹4,80,000.
Furniture = 2,00,000 − 80,000 = ₹1,20,000.
PPE = 6,00,000 + 7,50,000 + 4,80,000 + 1,20,000 = ₹19,50,000; with patents ₹1,50,000 the sub-head is ₹21,00,000.

Answer:

Particulars	₹
Property, Plant and Equipment
Land	6,00,000
Building (10,00,000 − 2,50,000)	7,50,000
Machinery (8,00,000 − 3,20,000)	4,80,000
Furniture (2,00,000 − 80,000)	1,20,000
	19,50,000
Intangible Assets: Patents	1,50,000
Total	21,00,000

Example 4: Assets side from a list of balances · 6 marks · Long answerHarder board level

Prepare the assets side of the Balance Sheet of Willow Ltd. from: Land and building ₹12,00,000; Plant and machinery (net) ₹9,00,000; Patents ₹2,00,000; Long-term investments (non-trade) ₹3,00,000; Raw materials ₹1,20,000; Work-in-progress ₹80,000; Finished goods ₹2,00,000; Stores and spares ₹20,000; Debtors ₹3,00,000; Bills receivable ₹50,000; Provision for doubtful debts ₹20,000; Cash in hand ₹10,000; Balance with bank ₹1,40,000; Prepaid insurance ₹6,000; Accrued income ₹4,000; Loan to a supplier recoverable in 8 months ₹30,000; Staff advance recoverable after 2 years ₹25,000. (6 marks)

Try it first, then show the solutionSolution

PPE = 12,00,000 + 9,00,000 = ₹21,00,000; with patents 2,00,000 the sub-head is ₹23,00,000.
Non-Current Assets = 23,00,000 + 3,00,000 + 25,000 = ₹26,25,000.
Inventories = 1,20,000 + 80,000 + 2,00,000 + 20,000 = ₹4,20,000.
Trade Receivables = 3,00,000 + 50,000 − 20,000 = ₹3,30,000; Cash = 10,000 + 1,40,000 = ₹1,50,000; Other Current Assets = 6,000 + 4,000 = ₹10,000.
Current Assets = 4,20,000 + 3,30,000 + 1,50,000 + 30,000 + 10,000 = ₹9,40,000; Total = 26,25,000 + 9,40,000 = ₹35,65,000.

Answer:

Particulars	₹
II. Assets
1. Non-Current Assets
(a) PPE and Intangible Assets	23,00,000
(b) Non-current Investments	3,00,000
(c) Long-term Loans and Advances	25,000
	26,25,000
2. Current Assets
(a) Inventories	4,20,000
(b) Trade Receivables	3,30,000
(c) Cash and Cash Equivalents	1,50,000
(d) Short-term Loans and Advances	30,000
(e) Other Current Assets	10,000
	9,40,000
Total	35,65,000

Example 5: Receivables shown gross by mistake · 3 marks · Short answerHOTS / competency

In Willow Ltd. above, the accountant showed Trade Receivables at the gross ₹3,50,000 and put the ₹20,000 provision under Short-term Provisions. Current Liabilities were otherwise ₹4,70,000. Compare total assets and the Current Ratio before and after the error, and explain which is correct. (3 marks)

Try it first, then show the solutionSolution

Correct: Current Assets 9,40,000, Current Liabilities 4,70,000, Current Ratio = 2.00 : 1; total assets ₹35,65,000.
Error: Current Assets 9,60,000, Current Liabilities 4,90,000, Current Ratio = 9,60,000 ÷ 4,90,000 = 1.96 : 1; total assets ₹35,85,000.
A provision for doubtful debts is a deduction from the receivable, not a liability, so the net figure is correct.

Answer: Correct: assets ₹35,65,000 and ratio 2.00 : 1. Error: assets ₹35,85,000 and ratio 1.96 : 1. Show receivables net of the provision.

Where students lose marks in Company Balance Sheet: Assets Side and Notes to Accounts

The slips examiners see most often, and what to write instead.

Mistake: Showing PPE at cost
Ignoring accumulated depreciation.
Wrong working
Building = 10,00,000
Right working
Building = 10,00,000 − 2,50,000 = 7,50,000
Do this: Always deduct accumulated depreciation before adding up.
Usually costs: 1-2 marks.
Mistake: Treating the provision for doubtful debts as a liability
Seeing a credit balance.
Wrong working
Trade Receivables 3,50,000; Short-term Provisions +20,000
Right working
Trade Receivables = 3,50,000 − 20,000 = 3,30,000
Do this: Provision for doubtful debts is deducted from receivables.
Usually costs: 1-2 marks.
Mistake: Placing a staff advance recoverable in two years under current assets
Reading "advance" and stopping.
Wrong working
Short-term Loans and Advances 55,000
Right working
Long-term Loans and Advances 25,000; Short-term Loans and Advances 30,000
Do this: Test the recovery date: beyond twelve months is non-current.
Usually costs: 1 mark.
Mistake: Writing "Fixed Assets" as the sub-head
Old format.
Wrong working
Fixed Assets: Tangible Assets
Right working
Property, Plant and Equipment and Intangible Assets: Property, Plant and Equipment
Do this: Use the amended wording from the syllabus.
Usually costs: Half to 1 mark.

Exam tips

Show the note for PPE with cost, accumulated depreciation and net figure.
Show Trade Receivables as one figure after the provision, with a working note.
Treat prepaid and accrued items as Other Current Assets.
Check that total assets equals total equity and liabilities before finishing.

Practice questions on Company Balance Sheet: Assets Side and Notes to Accounts

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
Which of these is an intangible asset?
(a) Land
(b) Trademarks
(c) Stores and spares
(d) Furniture
Hint
No physical form.
Answer
(b) Trademarks
Q2 · 3 marks · Short answerBoard level
State the main head and sub-head for: (i) Bills receivable; (ii) Prepaid rent; (iii) Long-term non-trade investments; (iv) Capital work-in-progress; (v) Advance to a supplier recoverable within 6 months. (3 marks)
Hint
Twelve-month test again.
Answer
(i) Current Assets: Trade Receivables; (ii) Current Assets: Other Current Assets; (iii) Non-Current Assets: Non-current Investments; (iv) Non-Current Assets: PPE and Intangible Assets; (v) Current Assets: Short-term Loans and Advances.
Q3 · 3 marks · Short answerHarder board level
From the following find the amount of PPE and Intangible Assets: Land ₹4,00,000; Buildings at cost ₹9,00,000 (accumulated depreciation ₹1,80,000); Computers at cost ₹2,40,000 (accumulated depreciation ₹1,60,000); Software ₹70,000. (3 marks)
Hint
Net each asset first.
Answer
Buildings 7,20,000; computers 80,000; PPE = 4,00,000 + 7,20,000 + 80,000 = 12,00,000; with software ₹70,000, the sub-head is ₹12,70,000.
Q4 · 6 marks · Long answerHarder board level
Find the total of Current Assets from: Marketable securities held as temporary investment ₹40,000; Raw materials ₹90,000; Work-in-progress ₹60,000; Finished goods ₹1,50,000; Loose tools ₹10,000; Debtors ₹2,40,000; Bills receivable ₹60,000; Provision for doubtful debts ₹15,000; Cash in hand ₹8,000; Balance with banks ₹1,12,000; Prepaid expenses ₹7,000. If Non-Current Assets are ₹14,00,000, also find total assets. (6 marks)
Hint
Five current-asset sub-heads.
Answer
Inventories 3,10,000; Trade Receivables 2,85,000; Cash and Cash Equivalents 1,20,000; Current Investments 40,000; Other Current Assets 7,000. Current Assets = ₹7,62,000; Total assets = 14,00,000 + 7,62,000 = ₹21,62,000.
Q5 · 3 marks · Short answerHOTS / competency
A company buys a patent for ₹1,20,000 on 1st April 2025 and writes it off equally over 4 years. A director says the write-off reduces the bank balance each year. Find the value shown on 31st March 2027 and comment. (3 marks)
Hint
Cash was paid on purchase day.
Answer
Yearly amortisation = 30,000; value = 1,20,000 − 60,000 = ₹60,000. The cash left the business on purchase; amortisation is a non-cash charge that reduces profit and the asset value, not the bank balance.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Main heads on the assets side?Show answer
Non-Current Assets and Current Assets.
2.What replaces "Fixed Assets" in the amended format?Show answer
Property, Plant and Equipment and Intangible Assets.
3.What does Other Current Assets contain in ISC questions?Show answer
Prepaid expenses and accrued income.
4.Trade Receivables are shown gross or net of provision?Show answer
Net of the provision for doubtful debts.
5.Where does a staff advance recoverable in 2 years go?Show answer
Long-term Loans and Advances.

Company Balance Sheet: Assets Side and Notes to Accounts: frequently asked questions

Are investments current or non-current?

By holding period. Non-current investments are held beyond a year; current investments are held for a short time. Unless a question says trade, treat them as non-trade.

Is goodwill a fictitious asset?

No. Purchased goodwill is an intangible asset, shown at cost less amounts written off.

Where do I show cash at bank?

Under Cash and Cash Equivalents, along with cash in hand.

Do notes need numbering?

Yes. Use a Note No. column and give each note its own working.