Bank balance

The balance sheet of the bank reflects the important economic information underlying the organization of banking and improving the management of the bank. With its help, state bodies control the development of the monetary and credit sphere on a national scale. The management of the bank, in turn, on the basis of the balance sheet, evaluates the final results achieved by the bank and the effectiveness of the activities carried out, outlines further steps to develop banking operations.

Make up the bank's balance sheet in the form of a summary table created by the principle of grouping operations according to economically homogeneous indicators that characterize the state of bank accounts on a certain date.

The balance of a commercial bank is a balance sheet, which reflects the state of its own, lent and attracted bank funds, shows how they are placed in credit and other active operations. Practically it is a source of information for monitoring the formation of monetary resources and their placement, the state of credit, cash, settlement and other banking operations, including operations with securities.

Accounts of the nomenclature of bank balances are divided into balance and off-balance accounts.

The first of them are:

• Passive are the bank's resources intended for lending and other banking operations, they are a reflection of bank funds, individuals' funds of enterprises and organizations, state budget revenues, deposits, funds in settlements, bank profits, accounts payable, other liabilities and borrowed funds, Including refinancing amounts that were received from other banks;
• Active - the debt on them shows how and in what directions these resources were used, cash is kept in the bank's cash desks, long-term and short-term loans, state budget expenditures, accounts receivable, and other active assets.

The latter, off-balance sheet, are a reflection of the movement of documents and valuables that are sent to banking institutions for commission, storage or collection, including payment signs of state duties, letterheads, strict accountability and others.

The bank's balance sheet is grouped according to the degree of liquidity in the articles for the following assets:

• Cash, funds on accounts in other banks, that is, reflect the "primary reserves" for liquidity;
• Investment of funds in commercial bills, short- and long-term securities and others, that is, part of them are "secondary reserves", as they can be promptly converted into cash with little risk of loss;
• Loans granted to individual borrowers, organizations, enterprises, other banks; Since there is a possibility of their late repayment, these assets of the balance are classified as low-liquid investments;
• Investment - investing in real and personal property, creating joint ventures, branches, etc.

Accordingly, the economic essence of the operations carried out, the bank's balance is grouped into articles on:

• Operations with clients, including operations to attract resources and provide loans;
• Interbank operations, including short- and long-term ones; Other operations involving investing in short-term liquid securities and other securities.

The bank's balance sheet has a standard form approved by the Bank of Russia, and is based on the following principles:

• Continuity of activity,
• Efficiency, inviolability of the incoming balance,
• The priority of the content over the form,
• Openness of accounting,
• The constancy of the rules of accounting,
• Caution, reflection on the cash method of income and expenditure,
• Separate reflection of assets and liabilities.