Performa of Final Accounts of Banking Companies Class 12 Handwritten Notes pdf Download

 

   A. Overview of Final Accounts: Final accounts are financial statements that summarize the financial performance and position of a company. For banking companies, the final accounts include specific elements and considerations tailored to their operations.

    A. Balance Sheet:

        1. Assets:

            a. Cash and Cash Equivalents: Including cash in hand, balances with central banks, and other highly liquid assets.

            b. Loans and Advances: Representing the funds lent by the bank to borrowers.

            c. Investments: Including securities such as government bonds and corporate bonds held by the bank.

            d. Other Assets: Any other assets owned by the bank, such as premises, equipment, or intangible assets.

            a. Deposits: Representing the funds held by the bank on behalf of its customers.

            b. Borrowings: Including any loans or financial instruments issued by the bank to raise funds.

            c. Other Liabilities: Any other obligations or liabilities, such as accrued expenses or provisions.

            a. Capital and Reserves: Representing the shareholders' investment and retained earnings of the bank.

        1. Interest Income: Revenue generated from interest on loans, advances, and investments.

        2. Interest Expense: Costs incurred due to interest paid on deposits and borrowings.

        3. Operating Income: Other income sources such as fees, commissions, and trading gains.

        4. Operating Expenses: Costs related to operating the bank, including salaries, rent, and administrative expenses.

        5. Provision for Loan Losses: Accounting for potential losses on loans due to defaults or non-performing assets.

        6. Taxes and Regulatory Charges: Taxes and regulatory fees paid by the bank.

        7. Net Profit or Loss: The final result after deducting all expenses from the operating income.

    A. Compliance with Accounting Standards: Banking companies must adhere to specific accounting standards and guidelines for preparing their final accounts, such as International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP) applicable in their jurisdiction.

    B. Regulatory Reporting: Banks are required to report their final accounts to regulatory authorities, such as central banks or financial regulators, to ensure transparency and compliance with regulatory requirements.

    C. Additional Disclosures: Banking companies may need to provide additional disclosures in their final accounts, such as risk exposures, capital adequacy ratios, and liquidity positions, in accordance with regulatory requirements.

    A. Independent Audit: Final accounts of banking companies are subject to external auditing by independent auditors to ensure their accuracy and compliance with accounting standards.

    B. Auditor's Report: The auditors provide an opinion on the fairness and reliability of the final accounts through an auditor's report accompanying the financial statements.

   A. Final accounts of banking companies present a comprehensive view of their financial position and performance.

   B. These accounts play a crucial role in assessing the financial health of banking companies, supporting decision-making, and meeting regulatory requirements.

   C. Adhering to accounting standards, regulatory reporting, and external verification through audits ensures the integrity and transparency of the final accounts of banking companies.