The glossary to understand and take action

Balance sheet

The balance sheet presents, at a given date, the company's assets and the resources or obligations financing them.

Notion comptable, fiscale ou juridique · Luxembourg Fiduciaries Editorial Team · Reviewed on

Understand the scope

Definition and points to distinguish

It complements the profit and loss account, which describes a period. A significant asset or a profit does not, on its own, guarantee the availability of cash for upcoming due dates.

In your file

What this changes in practice

The balance sheet is a snapshot of the accounting position at a given date. It makes it possible to compare the company's resources and uses, but it does not by itself describe the year's cash flows. To read it, examine the composition of assets, equity, liabilities and their due dates. The valuation methods and events explained in the notes may be essential to understanding the amounts shown.

A scenario to help you understand

Educational example

An increase in the balance sheet total may result from an accumulation of inventory financed by suppliers. It does not, in isolation, prove that the business is more profitable or that the company has more cash available.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Comparer plusieurs exercices
  • Examiner la qualité des actifs
  • Analyser les échéances et les méthodes d’évaluation

The practical question

Find out more

Une société avec beaucoup d’actifs peut-elle manquer de trésorerie ?

Oui. Les actifs peuvent être immobilisés dans des équipements, des stocks ou des créances lentes à encaisser. Comparez leur disponibilité aux échéances des dettes. Le bilan aide à comprendre le financement, mais un calendrier d’encaissements et décaissements est nécessaire pour apprécier la capacité de paiement dans les semaines qui viennent.

Connecting concepts

Terms to know as well

Continue with the concepts, contacts and procedures related to this topic.

AssetsThe assets side of the balance sheet includes resources controlled by the company: fixed assets, inventories, receivables, cash and other items recognised under accounting rules.LiabilitiesThe liabilities side of the balance sheet presents the company's sources of financing and obligations, including equity, provisions and debts according to the applicable format.Income statementThe income statement, also called the profit and loss account in Luxembourg accounts, matches income and expenses for a period.Lux GAAPLux GAAP refers to the Luxembourg accounting rules applicable to the preparation of accounts within the national framework.AccountingAccounting organises the recording of transactions and the production of information on the company’s financial position and results.Annual accountsAnnual accounts present the entity’s financial position and result at the end of a financial year, together with the documents required under its regime.

Put it into practice

Explore further with our guides

Practical guideBusiness cash flow: anticipating pressures and deciding in timePractical guideReading a balance sheet: useful questions for a business ownerPractical guideReading the profit and loss account: explaining business performancePractical guideTaking over a business: preparing the accounting and tax review

Sources and verification

References consulted on 20 September 2026. Official procedures specify the applicable conditions and exceptions.

This guide explains a general process. The applicable rules depend on your situation; it does not constitute personalised advice. Report a correction.

A definition gives you a reference point. To examine your situation, clarify your question with a professional.