Balance sheet format for a Pakistani company explained
The balance sheet — properly the statement of financial position — is the financial statement people most often try to lay out from intuition and get wrong. In Pakistan its format is not a matter of preference: the Companies Act prescribes the structure and ordering that companies must follow. This guide sets out that structure, the current/non-current logic that organises it, and a worked layout, so the statement reads the way regulators, auditors and lenders expect.
The identity behind the format
Every balance sheet expresses one equation: assets = equity + liabilities. Everything a business controls (its assets) is funded from one of two sources — the owners (equity) or outside parties (liabilities). The format exists to present both sides of that identity clearly, which is why the statement always balances; if it does not, the records contain an error. Understanding the identity first makes the prescribed ordering intuitive rather than arbitrary.
The prescribed structure
A Pakistani company presents the statement in two halves, each ordered as the Companies Act schedule requires:
- Equity and liabilities
- Share capital and reserves — issued capital, then reserves and unappropriated profit.
- Non-current liabilities — long-term borrowings, lease liabilities, deferred tax, long-term provisions.
- Current liabilities — trade and other payables, short-term borrowings, current portion of long-term debt, tax payable.
- Assets
- Non-current assets — property, plant and equipment, intangibles, long-term investments.
- Current assets — stock-in-trade, trade debts, advances, cash and bank balances.
The ordering is deliberate and prescribed, so an auditor reading the statement expects each class in its place. This is also why a well-designed chart of accounts pays off — if accounts are already grouped by these classes, the balance sheet falls out of the ledger in the right order.
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Below is a full statement of financial position as a Pakistani company would present it, with the note column and the comparative year. Figures are Rs in thousand for a 30 June year end.
The line items follow the presentation ordinarily used by Pakistani companies. The disclosure requirements attaching to them sit in the Companies Act 2017 — the Fourth Schedule under section 225 for listed companies and their subsidiaries, and the Fifth Schedule for non-listed companies — applied alongside IFRS as adopted in Pakistan.
| Note | 2026 | 2025 | |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 4 | 310,000 | 295,000 |
| Right-of-use assets | 5 | 34,000 | 38,000 |
| Intangible assets | 6 | 20,000 | 22,000 |
| 364,000 | 355,000 | ||
| CURRENT ASSETS | |||
| Stock in trade | 7 | 72,000 | 60,000 |
| Trade debts | 8 | 81,000 | 66,000 |
| Contract assets | 9 | 15,000 | 13,000 |
| Advances, deposits and prepayments | 10 | 12,000 | 14,000 |
| Cash and bank balances | 11 | 18,000 | 12,700 |
| 198,000 | 165,700 | ||
| TOTAL ASSETS | 562,000 | 520,700 | |
| SHARE CAPITAL AND RESERVES | |||
| Issued, subscribed and paid-up capital | 12 | 120,000 | 120,000 |
| Unappropriated profit | 116,000 | 94,790 | |
| 236,000 | 214,790 | ||
| NON-CURRENT LIABILITIES | |||
| Long-term financing | 13 | 130,000 | 140,000 |
| Lease liabilities | 14 | 18,000 | 21,000 |
| Deferred taxation | 15 | 10,000 | 9,000 |
| 158,000 | 170,000 | ||
| CURRENT LIABILITIES | |||
| Trade and other payables | 16 | 97,000 | 79,000 |
| Contract liabilities | 9 | 20,000 | 17,000 |
| Accrued mark-up | 4,000 | 3,500 | |
| Short-term borrowings | 17 | 28,000 | 15,000 |
| Current portion of long-term financing | 13 | 12,000 | 12,000 |
| Provision for taxation | 7,000 | 9,410 | |
| 168,000 | 135,910 | ||
| Contingencies and commitments | 18 | — | — |
| TOTAL EQUITY AND LIABILITIES | 562,000 | 520,700 | |
How to prove it before you issue it
A balance sheet is checked by articulation, not by inspection. Three ties must hold, and if any fails the error is upstream:
| Check | Against | On these figures |
|---|---|---|
| Total assets = total equity and liabilities | Itself, both years | Rs 562,000 thousand and Rs 520,700 thousand |
| Closing equity | Statement of changes in equity | Rs 236,000 thousand |
| Cash and bank balances | Statement of cash flows closing cash | Rs 18,000 thousand |
Three features are not optional and are the ones most often dropped from a draft. The note column must reference the supporting note for every line that has one. The comparative column is required and must be restated if the current-year presentation changed. And contingencies and commitments appears on the face even when the amount is nil, because its absence is itself information.
Two ratios fall straight out. Current assets of Rs 198,000 thousand against current liabilities of Rs 168,000 thousand is a current ratio of 1.18. Non-current liabilities of Rs 158,000 thousand against equity of Rs 236,000 thousand is gearing of 67%. The current / non-current split exists so those can be read without adjustment — which is why parking the current portion of long-term financing in the wrong section distorts both at once.
The current / non-current split
The primary structural division is current versus non-current, set by a twelve-month test from the reporting date:
- Current — expected to be settled or realised within twelve months: receivables, stock, cash on the asset side; payables and short-term borrowings on the liability side.
- Non-current — longer than twelve months: fixed assets and long-term investments; long-term loans and lease liabilities.
This split is what lets a reader assess liquidity at a glance — comparing current assets against current liabilities shows whether the business can meet its short-term obligations. Misclassifying a long-term loan's current instalment, or parking stock as non-current, distorts that reading.
Where the format goes wrong
Most balance-sheet errors are not arithmetic but classification, and they distort the picture even when the statement balances. The recurring ones are worth naming. Presenting the current portion of a long-term loan as non-current understates short-term obligations and flatters liquidity. Netting a bank overdraft against a positive bank balance at another bank hides gross borrowing. Leaving the owner's drawings inside expenses rather than as a reduction of equity misstates both profit and capital. Carrying obsolete stock or irrecoverable debtors at full value overstates assets and, by extension, equity. And omitting a provision for a known liability keeps the balance sheet looking healthier than the business is. None of these is caught by the balancing check, because a misclassification moves a figure from one line to another without breaking the identity. They are caught only by someone who understands what each line should contain — which is precisely what an auditor tests, and why the prescribed structure matters as a discipline rather than a formality.
Framework and audit
The exact disclosure detail depends on the reporting framework the company applies — full IFRS, IFRS for SMEs, or the small-company framework — which governs how much is shown on the face of the statement versus in the notes. Whatever the framework, the statement of financial position is part of the set the auditor forms an opinion on, so it must comply with both the framework and the Companies Act ordering. For how the balance sheet fits with the other statements and the trial-balance-to-accounts process, see financial statement preparation, and for the audit itself, the statutory audit requirement. The companion income statement is covered in the profit and loss format.
Sources
This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.
Questions people also ask
What order do line items go in on a Pakistani balance sheet?
A Pakistani company follows the ordering in the relevant schedule to the Companies Act, which sets out equity and liabilities and then assets, each divided into non-current and current. Within those groups the schedule prescribes the sequence — share capital and reserves first under equity, then long-term then short-term liabilities, matched against non-current then current assets. It is a prescribed presentation, not a free choice.
What is the difference between current and non-current on the balance sheet?
Current items are those expected to be settled or realised within twelve months of the reporting date — trade receivables, stock, cash, trade payables, short-term borrowings. Non-current items are longer-term — property and equipment, long-term investments, long-term loans. The current/non-current split is the primary structural division of a modern balance sheet and drives how liquidity is read.
Does the balance sheet have to balance exactly?
Yes — that is the defining feature. Total assets must equal total equity plus total liabilities, because every asset is funded either by owners (equity) or by others (liabilities). If it does not balance, there is an error in the underlying records, not a presentation choice. The equality is an accounting identity, so a balance sheet that does not balance is simply wrong.
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