General rules state that any company balance sheet needs to show the items mentioned in format listed in Section B. Similarly, every profit and loss account of a company should display the items as defined by the formats in Section B, in the order specified by the format.

Directors may vary the format of the balance sheet to highlight short-term and long-term assets and liabilities differently provided:

• The information shown is equivalent to the format specified in Section B
• The presentation aligns with generally accepted accounting principles or practice

Similar principles apply to the profit and loss account.

The format adopted must not assign letters or numbers to any item on the balance sheet or profit and loss account. The following rules should be followed despite any adaptations mentioned earlier.

Directors must use the same format in preparing financial statements for upcoming years, unless there are special reasons for change:

• Any change in format should be accompanied by the reasons for the change in a note to the financial statements.

Further details may be provided for any items required by paragraph 2:

• Preliminary expenses, costs of research, and expenses of and commission on any issue of shares or debentures, should not be treated as assets in the balance sheet.
• Subtotals may be included where they facilitate the understanding of the financial position or profit/loss of the business for the financial year concerned.

The financial statements may combine certain items under the following conditions:

• The individual amounts of such items are not material to assessing the financial position or profit or loss for the financial year in question.
• The combination of such items aids that assessment.

Details of combined items must be disclosed in notes to the financial statements. The directors can adapt the arrangement and headings and sub-headings of items in the format for the balance sheet or profit and loss account under certain circumstances. In any case where an asset or liability is related to more than one item listed in the balance sheet formats, this relationship should be disclosed.

The opening balance sheet for every financial year must correspond to the closing balance sheet of the previous financial year. Every item shown in the balance sheet or profit and loss account, or notes thereto, of a company, must also display the corresponding amount for the preceding financial year unless the amount is not comparable.

In the balance sheet or profit and loss account of a company, there should be no heading or sub-heading if there is no amount to be shown for that item for that financial year. However, if there is an amount for the preceding financial year, that amount should be displayed under the heading or sub-heading required by the format.

In the financial statements, amounts for items representing assets or income should not be set off against amounts for items representing liabilities or expenditure, and vice versa, unless such a set off complies with applicable accounting standards and the gross amounts are disclosed in a note to the financial statements.

References to items listed in any formats in Section B refer to those items along with any notes following the formats which apply to any of those items. The heading of each note gives the required heading or sub-heading for the item to which it applies and a reference to any letters and numbers assigned to that item in the formats.

The balance sheet format includes fixed assets, current assets, creditors with amounts falling due within one year, net current assets/liabilities, total assets less current liabilities, creditors with amounts falling due after more than one year.