Balance sheet structure

The following balance sheet structure is just an example. It does not show all possible kinds of assets, equity and liabilities, but it shows the most usual ones. Because it shows Goodwill it could be a consolidated balance sheet.

Balance Sheet of XYZ, Ltd. as of 31 December 2010 ASSETS Current Assets Cash and cash equivalentsMarketable SecuritiesAccounts receivableInventoriesPrepaid ExpensesInvestments held for tradingOther current assets Total current assets Fixed assets (Non-Current Assets) Property, plant and equipment Less: Accumulated DepreciationGoodwill Other intangible fixed assetsInvestments in associatesDeferred tax assets Total fixed assetsTotal assets LIABILITIES and EQUITY Current liabilities Accounts payableCurrent income tax liabilitiesCurrent portion of bank loans payableShort-term provisionsOther current liabilities Total current liabilities Long term Liabilities (Fixed Liabilities) Bank loansIssued debt securitiesDeferred tax liabilityProvisionsMinority interest Total long term liabilities Equity Share capitalCapital reservesRevaluation reserveTranslation reserveRetained earnings Total equity Total liabilities and equity

Equity valuation

The real value to a purchaser of the business or a shareholder may be different from the net assets shown by the balance sheet. This is because factors that affect the value of a business may not be recorded yet. For example, a purchaser will be interested in the future earnings of the business, whether assets such as property have been revalued recently, and whether there are potential liabilities in the future such as lawsuits. The value of the assets in the balance has also been based on the assumption that the business is a going concern, otherwise the break-up value of the assets may be far less than the value in the balance sheet.

10. Translate and explain the words and expressions in bold.

11. Do sight translation of the information.

12. Read the following information.

Constructing a Balance Sheet

Case Study

A new business starts up as a limited company called Sunrise Ltd by raising $10,000 from the owners i.e. share holders. The money is put into a new bank account. What would the assets, liabilities and equity be?

Assets: Bank Balance 10,000 Equity & Liabilities: Share Capital 10,000

They then use 6,000 of its bank account to buy a delivery van. Assets and liabilities after this transaction:

Assets: Bank Balance 4,000Delivery Van 6,000 Equity & Liabilities: Share Capital 10,000

Sunrise Ltd then buys some inventory at 3,000 on credit. Assets and liabilities after this transaction:

Assets: Bank Balance 4,000Delivery Van 6,000Inventory 3,000 Liabilities: Accounts Payable 3,000 (to be paid to creditors) Equity: Share Capital 10,000

Total assets must always equal total liabilities (and equity). It is inevitable as the liabilities (and equity) are providing the funds that we are spending on these assets.

Shortly afterwards, after selling 1,000 of inventory for 2,500, payment of 2,600 of the accounts payable and the purchase of 2,200 of machinery financed by a 2,200 bank loan, the assets and liabilities change to the following:

Sunrise Ltd.Balance Sheet As of December 31, 2009----------------------------------- Assets ----------------------------------- Fixed Assets Delivery Van 6,000 Machinery 2,200 Total fixed assets 8,200Current Assets Bank Balance 1,400 Inventory 2,000 Accounts Receivable 2,500----------------------------------- Total current assets 5,900Total assets 14,100 ----------------------------------- Liabilities and Equity ----------------------------------- Current Liability Accounts Payable 400 Long-Term Liabilities Loans Repayable 2,200 Total Liabilities 2,600 ----------------------------------- NET ASSETS 11,500 ----------------------------------- Shareholders' Equity Share Capital 10,000 Retained profits 1,500--------------------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 11,500

Points to note:

· Must be headed with the name of the reporting entity (e.g. Sunrise Ltd) and the date.

· The van has not been depreciated and there are no other trading expenses

· The terms 'Current Liability' and 'Long-Term Liability' are the traditional names possibly used by sole traders or partnerships. Limited companies may use the phrases 'Liabilities: Amounts falling due within 1 year' and 'Liabilities: Amounts falling due after 1 year'.

· The Total Equity may also be called the 'Net Worth'.

· The Net Worth is in principle what the company is worth, it shows the monetary amount that would effectively be left, if all assets were sold and all liabilities paid off.

(Retrieved from "http://en.wikipedia.org/wiki/Balance_sheet")

13. Translate the expressions limited company, on credit.

14. Write out and learn the terms used in the usual balance sheet.

15. Translate the balance sheet presented in the text.

16. Find examples of the income statement, the cash flow statement, the statement of retained earnings and translate them into Russian.

UNIT 4

MONEY

Text 1.

FOLLOW THE MONEY!

Pat Regnier

A 12-nation currency switchover creates a continent of 300 million tourists.

In Europe, old fears about Y2K returned as 2K2 loomed. Jan. 1 was the date for the 12-nation switch to one currency, and in the hours leading up to it, there were nightmare scenarios about riots and self-destructing cash machines as lire, francs, guilders, pesetas and deutsche marks were converted into euros.

When the time came, the banking network was indeed stretched thin. Banksys, the group that operates Belgium’s ATMs, recorded about 600 cash withdrawals a minute in the first two hours of the new year. Some 200 Dutch post offices kept there doors closed on the morning of Jan. 2 – the first business day of the euro era – because the postal bank, which handles the largest number of small bank accounts in the Netherlands, was not ready for the transition. In France, many motorways backed up as drivers eager to break franks into euro change skipped the credit-card and electronic E-Z lanes and jammed tollbooths. Meanwhile, some shopkeepers resisted government urgings to get old currencies out of the system by giving euros as change. “I am not a bank,” griped a vegetable seller at the Place d’Aligre market in Paris.

The fears, however, were overblown. For the most part, Europeans greeted the launch with good humor and even civic-mindedness. The debut of more than 10 billion new bank notes, legal tender from Lisbon to Helsinki and from Dublin to Athens, has given 300 million Europeans their first true experience of union. (Britain, the most significant hold-out, is keeping the pound for now.) An Austrian who stood in a long bank queue to get her first walletful of euros could go home and see Spaniards doing the same thing on TV. The much photographed lines outside some banks were strictly voluntary displays of euro enthusiasm, since in most countries the old currencies are still good through February.

Accepting the new money is one thing. Getting used to it will take a little longer. For the next few weeks, Europeans will live like tourists in their own countries, pondering price tags and trying to decide if that new sweater or pack of beer is a bargain or a rip-off. Most Italians will no longer be millionaires, and the French will have to cope with the fiddly exchange rate of 6.6 francs to €1. (“It’s easy,” says another Paris greengrocer, displaying his mathematical prowess: “You just divide by 50% and add that to the original, then times by 10…”)

Well, the good news is big banks like Société Générale have passed out free calculators. Even the Germans, who merely had to chop the old deutschemark price in half, seem perplexed. Almost 50% of Germans polled thought a new Volkswagen Polo priced at 26,000 deutsche marks was expensive, but only one-third said the same of the car priced at the equivalent €13,000. (If you must know, €1=89¢ American.)

In the long run, the greater transparency of euro pricing should work to consumers’ benefit. Well-traveled Europeans instinctively know prices are cheaper in some countries than in others, and now it will be much more obvious. “Manufacturers and multinational corporations will have to explain the difference,” says Carmel Foley, Ireland’s director of consumer affairs. “That sort of scrutiny will exert downward price pressure.”

However, a single currency will also make Europe’s economies more difficult to manage. The European Central Bank in Frankfurt must set a single interest rate for rural and still developing countries like Portugal as well as advanced ones like Germany. Unlike governments in other vast currency areas – in particular, the U.S. – the European Union doesn’t yet have the power to adjust for regional imbalances with federal taxes and spending.

Still, in a place like Kosovo, the euro has given the war-weary populace a larger sense of belonging. On the euro’s third day, residents of the capital, Pristina, braved subzero temperatures to get the bills. By day’s end, a small grocery on the city’s main street had €4.50 in its till, though prices were shown in German marks, the official currency since 1999. Kosovars are used to a variety of currencies: US dollars, Swiss franks, Yugoslav dinars. Now there’s the euro. Says shopkeeper Shukrane Shaqiri, warming her hands by a stove: “It’s the same for us, as long as it’s money.”

-Reported by Bruce Crumley and Delphine Schrank/Paris,

James Graff/Brussels, Andrew Purvis/Pristina, Ursula Sautter/Berlin and Chris Thornton/Dublin

1. Read the text and outline its main points.

2. Provide the information on the number and names of the European Union member states. Which of them have taken up the euro? What are the names of the old currencies of these countries? Which of them still cling to their national currencies?

3. Explain the meaning of the abbreviations Y2K and 2K2.

4. Translate the names of the following nations: албанцы, косовары, испанцы, конголезцы, израильтяне, иракцы, лаосцы, финны, литовцы, латыши, поляки, чехи, греки, бирманцы.

5. Translate the names of the following currencies: индийская рупия, индонезийская рупия, японская йена, китайский юань, датская крона, исландская крона, норвежская крона, шведская крона, чешская крона, итальянская лира, голландский гульден, фунт стерлингов, швейцарские франки, югославские динары. Which of them can take only singular form?

6. Find the English names of the national currencies of Romania, Bulgaria, Kyrgyzstan, Tajikistan, Uzbekistan, Israel, Mexico, Brazil, Argentina, Cuba, Egypt, Georgia, Armenia, Azerbaijan, Latvia, Lithuania, Estonia, Belarus, Kazakhstan, Turkmenistan, Moldova and Turkey.

7. Translate the following expressions from Russian into English using the text vocabulary: изымать из обращения, “обдираловка”, страхи были преувеличены, математические способности, дешевая покупка, храбро переносить минусовую температуру, переход на новую валюту, напряженный до предела, банкоматы, законное платежное средство, заполнить кошелек евро, находиться в обращении до конца февраля, добровольное проявление энтузиазма по отношению к евро, обменный курс, выпустить новые калькуляторы, федеральные налоги и дотации.

8. Think of the possible variants of translation of the following sentences:

A) For the most part, Europeans greeted the launch with good humor and even civic-mindedness.

B) “That sort of scrutiny will exert downward price pressure.”

9. Explain what E-Z lanes are.

10. Translate the text in writing.

TEXTS FOR SIGHT/CONSECUTIVE TRANSLATION

Text 1. RUSSIA’S RED-ERA DEBT PUT TO REST: $24 BILLION IN FOREIGN DEBT PAID OFF

RUSSIA has wiped out its Soviet-era debts with a repayment of $US23.7 billion ($31.1 billion) that symbolizes the country's transformation from economic basket case to powerhouse. The dramatic display of Russia's new-found economic clout comes just eight years after it defaulted on more than $US40 billion in debt.

The move knocked about a third off the country's foreign debts, which previously stood at $US70 billion. Russia had been due to pay off the debts by 2020, but the sharp rise in the price of oil has engineered a dramatic improvement in the country's fortunes. That enabled it to bring the repayment forward, at an estimated saving of $US12 billion.

In July, Mr Putin said: "We used to live with our hand held out for many years... but now the Russian economy cannot only repay debts, but do so ahead of time." The Finance Ministry said the repayment would reduce Russia's foreign debts as a share of GDP to just 9 per cent. Christopher Green, senior economist at the Moscow Narodny Bank in London, said the move had political implications, as well as making economic sense. "It reflects the emergence of Russia as an economy on to the global stage," he said.

Text 2. RUSSIAN FOREIGN DEBT DOWN $10.2 BLN IN 2009

MOSCOW, Jan. 13 (Xinhua) - The total external debt of Russia stood at 469.7 billion U.S. dollars as of Jan. 1, 2010, decreasing 10.2 billion dollars as compared with one year ago, said the Russian Central Bank on Wednesday.

The foreign debt of Russia's general government contracted by 500 million dollars to 30 billion dollars on a year-on-year basis, said the bank website.

Net foreign capital outflow from Russia last year was approximately 52.4 billion dollars. Russia's current account totaled 47.5 billion dollars, and the trade surplus 110.6 billion dollars.

Exports of goods and services were estimated at 303.3 billion dollars and 42.3 billion dollars in 2009, while imports of those stood at 192.7 billion dollars and 62.2 billion dollars respectively.

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