A condensed balance sheet is a highly summarized balance sheet that combines many detailed accounts into a small number of major line items. It is one of the condensed financial statements companies prepare when full detail is not needed.
What a condensed balance sheet shows
A condensed balance sheet still follows the accounting equation, with total assets equal to total liabilities plus equity, but it reports only headline figures. A typical version might show cash, receivables, inventory, property and equipment, other assets, current liabilities, long-term debt and stockholders' equity, with no breakdown of individual accounts. Compared with a full classified balance sheet, items such as prepaid expenses, accrued liabilities and the separate classes of paid-in capital are folded into broader totals.
The format is most often seen in interim financial statements. US public companies file quarterly reports on Form 10-Q, and the SEC's Regulation S-X allows the balance sheet in those reports to be condensed, provided that major captions are shown and that any material changes since the last annual report are disclosed. The quarterly statements are usually reviewed rather than fully audited. Condensed balance sheets also appear in press releases, loan applications and summaries for boards and investors.
Because so much is combined, a condensed balance sheet should be read together with the full annual statements and the notes. On its own it may hide important details, such as the maturity dates of debt or the size of a single large receivable.