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Considering an operating lease?
Lease machinery, equipment and fit-outs from ₹25 lakh to ₹100 crore.
Check eligibilityWhat a balance sheet shows
For Indian companies, Schedule III to the Companies Act, 2013 sets the format. Items are split into non-current and current, and the statement is built from four main parts.
1
Non-current assets: property, plant and equipment, right-of-use assets, intangibles and long-term investments.
2
Current assets: inventory, trade receivables, cash and other items expected to turn into cash within a year.
3
Liabilities: borrowings, lease liabilities, trade payables and provisions, each split into non-current and current.
4
Equity: share capital plus reserves and surplus, including profits kept in the business.
A balance sheet is a snapshot. Read it with the profit and loss statement and the cash flow statement, and compare at least two year-ends to see the direction of travel.
When equipment funding shows up
How you fund equipment decides which lines move. The framework you report under matters as much as the funding choice.
WHAT CHANGES
Ind AS
Indian GAAP
Who reports under it
Listed firms and larger unlisted companies
Most other companies, including many SMEs
Buying with a loan
Equipment in PPE, loan in borrowings
Equipment in PPE, loan in borrowings
Operating lease of equipment
Right-of-use asset and lease liability
Not shown: rentals go through the P&L
Short-term leases
Can be kept off
Off balance sheet
How to read it before funding
Lenders and lessors read the balance sheet to judge how much more a business can carry. A CFO should read it the same way before choosing to buy, borrow or lease.
Check leverage and liquidity.
Compare borrowings and lease liabilities with equity, and current assets with current liabilities. These ratios shape pricing, covenants and how much a lender will extend.
Track the asset base.
Gross block, accumulated depreciation and capital work-in-progress show how old the assets are and how much capex is already under way.
Loan covenants define debt. Check whether lease liabilities count before you sign a lease.
Where it shows up
Buying or leasing a ₹5 crore CT scanner
ILLUSTRATIVE
A hospital group reporting under Ind AS needs a ₹5 crore CT scanner. If it buys with a ₹4 crore loan and ₹1 crore of cash, PPE rises by ₹5 crore, cash falls by ₹1 crore and borrowings rise by ₹4 crore. If it leases the scanner for five years, with no upfront payment and rentals whose present value is ₹4.2 crore, it records a right-of-use asset and a lease liability of ₹4.2 crore each, and cash is unchanged on day one. Under Indian GAAP the same operating lease would leave the balance sheet untouched, with rentals expensed.