> ## Documentation Index > Fetch the complete documentation index at: https://help.agatabo.com/llms.txt > Use this file to discover all available pages before exploring further. # Balance Sheet > View organizational assets, liabilities, and equity at a specific point in time ## What is a Balance Sheet? The **Balance Sheet** (also called Statement of Financial Position) shows what the organization owns (assets), owes (liabilities), and the net worth (equity) at a specific date. It's a snapshot of financial position at a single moment in time. **The accounting equation**: Assets = Liabilities + Equity The balance sheet must always balance. If it doesn't, there's an accounting error. *** ## API Endpoint **Get balance sheet report:** ```http theme={null} GET /reports/balance-sheet?asOfDate={date} Headers: x-organization-id: {organizationId} ``` **Query parameters:** | Parameter | Type | Required | Description | | ---------- | ----------------- | -------- | ---------------------------------------------------------------------------------- | | `asOfDate` | string (ISO date) | No | Snapshot date for balance sheet (YYYY-MM-DD). Defaults to current date if omitted. | **Response structure:** ```json theme={null} { "message": "Balance sheet report fetched successfully", "data": { "asOfDate": "2026-06-30T00:00:00.000Z", "assets": { "cashAndBank": 5000000, "loansReceivable": 15000000, "interestReceivable": 500000, "penaltyReceivable": 50000, "physicalAssets": 3000000, "physicalAssetsBreakdown": { "cashPurchase": 2500000, "collateral": 300000, "gift": 200000 }, "additionalItems": [], "total": 23550000 }, "liabilities": { "organizationUserSavings": 18000000, "borrowerSurplus": 50000, "additionalItems": [], "openingEquity": 1000000, "retainedEarnings": 3000000, "currentPeriodNetIncome": 500000, "reserves": [ { "name": "Emergency Fund", "amount": 800000 }, { "name": "Loan Loss Reserve", "amount": 200000 } ], "otherEquity": 0, "additionalEquityItems": [], "total": 23550000 }, "isBalanced": true } } ``` *** ## Report Structure ### Assets Section **Current Assets:** | Line Item | Account Role | Description | | ----------------------- | -------------------- | -------------------------------------- | | **Cash and Bank** | CASH | Cash on hand and bank account balances | | **Loans Receivable** | LOAN\_RECEIVABLE | Outstanding loan principal | | **Interest Receivable** | INTEREST\_RECEIVABLE | Accrued interest not yet paid | | **Penalty Receivable** | PENALTY\_RECEIVABLE | Accrued late payment penalties | **Fixed Assets:** | Line Item | Account Role | Description | | ------------------- | ----------------------------- | ---------------------------------- | | **Physical Assets** | FIXED\_ASSET | Equipment, furniture, buildings | | - Cash Purchase | FIXED\_ASSET (CASH\_PURCHASE) | Assets purchased with cash | | - Collateral | FIXED\_ASSET (COLLATERAL) | Assets acquired as loan collateral | | - Gift | FIXED\_ASSET (GIFT) | Donated assets | **Additional Assets:** Custom asset accounts (non-system roles) with non-zero balances. **Total Assets:** Sum of all asset line items. *** ### Liabilities and Equity Section **Note**: The backend combines liabilities and equity into a single "liabilities" object in the response, but conceptually these are separate categories. **Liabilities:** | Line Item | Account Role | Description | | ----------------------------- | ---------------------------- | ----------------------------- | | **Organization User Savings** | SAVINGS | Total member savings balances | | **Borrower Surplus** | BORROWER\_SURPLUS\_LIABILITY | Overpayments from borrowers | | **Additional Liabilities** | Custom liability roles | Non-system liability accounts | **Equity:** | Line Item | Account Role | Description | | ----------------------------- | ------------------- | -------------------------------------------------- | | **Opening Equity** | OPENING\_EQUITY | Initial capital when starting organization | | **Retained Earnings** | RETAINED\_EARNINGS | Accumulated profits from prior periods | | **Current Period Net Income** | Calculated | Income - Expenses for current open period | | **Reserves** | RESERVE\_ALLOCATION | Designated reserves (array of individual reserves) | | **Other Equity** | OTHER\_EQUITY | Miscellaneous equity accounts | | **Additional Equity** | Custom equity roles | Non-system equity accounts | **Total Liabilities + Equity:** Sum of all liability and equity line items. Must equal Total Assets. *** ## Example Balance Sheet **As of June 30, 2026** ### ASSETS **Current Assets:** ``` Cash and Bank 5,000,000 RWF Loans Receivable 15,000,000 RWF Interest Receivable 500,000 RWF Penalty Receivable 50,000 RWF ------------- Total Current Assets 20,550,000 RWF ``` **Fixed Assets:** ``` Physical Assets 3,000,000 RWF - Cash Purchase 2,500,000 RWF - Collateral 300,000 RWF - Gift 200,000 RWF ------------- Total Fixed Assets 3,000,000 RWF ``` **TOTAL ASSETS 23,550,000 RWF** *** ### LIABILITIES ``` Organization User Savings 18,000,000 RWF Borrower Surplus 50,000 RWF ------------- Total Liabilities 18,050,000 RWF ``` *** ### EQUITY ``` Opening Equity 1,000,000 RWF Retained Earnings 3,000,000 RWF Current Period Net Income 500,000 RWF Reserves: Emergency Fund 800,000 RWF Loan Loss Reserve 200,000 RWF ------------- Total Reserves 1,000,000 RWF Other Equity 0 RWF ------------- Total Equity 5,500,000 RWF ``` *** ### TOTALS ``` TOTAL LIABILITIES + EQUITY 23,550,000 RWF Assets 23,550,000 RWF Liabilities + Equity 23,550,000 RWF ============= ✓ BALANCED ``` *** ## Understanding Current Period Net Income **Current Period Net Income** represents the profit or loss from the current open accounting period. **Calculation:** ``` Current Period Net Income = Total Income - Total Expenses ``` **Why it appears on the Balance Sheet:** When an accounting period is **open** (not yet closed): * Income and Expense accounts have non-zero balances * These balances represent current period activity * Net Income is calculated and shown on the balance sheet as part of equity When an accounting period is **closed**: * Income and Expense accounts are zeroed out * Net Income is transferred to Retained Earnings * Balance sheet shows the transfer in Retained Earnings **Example:** **Open period (June 2026):** ``` Income accounts total: 2,500,000 RWF Expense accounts total: 2,000,000 RWF Current Period Net Income: 500,000 RWF (shows on balance sheet) ``` **After period close:** ``` Income accounts total: 0 RWF (reset) Expense accounts total: 0 RWF (reset) Retained Earnings: +500,000 RWF (increased by net income) Current Period Net Income: 0 RWF (transferred to retained earnings) ``` *** ## Key Financial Metrics ### Net Worth (Total Equity) ``` Net Worth = Total Assets - Total Liabilities ``` **Interpretation:** * Positive net worth: Organization is solvent (assets > liabilities) * Negative net worth: Organization is insolvent (liabilities > assets) * Growing net worth: Organization is profitable and healthy **Example:** ``` Total Assets: 23,550,000 RWF Total Liabilities: -18,050,000 RWF ------------- Net Worth: 5,500,000 RWF ✓ Positive (healthy) ``` *** ### Loan Portfolio ``` Loan Portfolio = Loans Receivable + Interest Receivable + Penalty Receivable ``` **Interpretation:** * Measures total amount owed by borrowers * Indicates lending activity * Major asset for most tontines **Example:** ``` Loans Receivable: 15,000,000 RWF Interest Receivable: 500,000 RWF Penalty Receivable: 50,000 RWF ------------- Loan Portfolio: 15,550,000 RWF ``` *** ### Member Deposits ``` Member Deposits = Organization User Savings ``` **Interpretation:** * Total savings members have deposited * Primary liability for most tontines * Source of funds for lending **Example:** ``` Organization User Savings: 18,000,000 RWF ``` *** ### Liquidity Ratio ``` Liquidity Ratio = Cash and Bank / Organization User Savings ``` **Interpretation:** * Measures ability to meet withdrawal demands * Healthy ratio: 10% - 30% * Too low: Risk of liquidity crisis * Too high: Underutilized funds (not lending enough) **Example:** ``` Cash and Bank: 5,000,000 RWF Organization User Savings: 18,000,000 RWF Liquidity Ratio: 5,000,000 / 18,000,000 = 27.8% ✓ Healthy ``` *** ### Loan-to-Savings Ratio ``` Loan-to-Savings Ratio = Loans Receivable / Organization User Savings ``` **Interpretation:** * Measures lending aggressiveness * Healthy ratio: 0.6 - 1.2 (60% - 120%) * Too low: Underutilizing member deposits * Too high: Over-leveraged (risky) **Example:** ``` Loans Receivable: 15,000,000 RWF Organization User Savings: 18,000,000 RWF Loan-to-Savings: 15,000,000 / 18,000,000 = 83.3% ✓ Healthy ``` *** ## Analyzing the Balance Sheet ### Healthy Indicators ✅ **Positive equity** (Total Assets > Total Liabilities) * Organization is solvent * Can cover all obligations ✅ **Adequate liquidity** (Cash 10-30% of member savings) * Can meet withdrawal demands * Not holding excessive idle cash ✅ **Balanced lending** (Loans 60-120% of member savings) * Utilizing deposits effectively * Not over-leveraged ✅ **Growing reserves** * Building safety cushion * Preparing for losses or emergencies ✅ **Low or zero borrower surplus** * Accurate payment tracking * Minimal overpayments ✅ **Growing retained earnings** * Profitable operations * Building long-term value *** ### Warning Signs ⚠️ **Negative equity** (Liabilities > Assets) * Organization is insolvent * Cannot cover obligations * **Action**: Reduce lending, increase reserves, improve profitability ⚠️ **Very low cash** (Cash under 5% of member savings) * Liquidity crisis risk * Cannot meet withdrawals * **Action**: Reduce new loans, accelerate collections ⚠️ **Over-leveraged** (Loans over 150% of member savings) * Excessive lending relative to deposits * High risk if defaults occur * **Action**: Slow new lending, increase member savings ⚠️ **Declining net worth** * Operating losses * Equity eroding * **Action**: Review expenses, improve loan recovery, increase income ⚠️ **Large borrower surplus** * Payment tracking issues * Overpayments not allocated * **Action**: Reconcile borrower accounts, apply surplus correctly ⚠️ **No reserves** * No cushion for losses * Risky in case of defaults * **Action**: Allocate portion of profits to reserves *** ## Comparative Balance Sheet **Analyze trends by comparing periods:** | Item | Dec 2025 | Jun 2026 | Change | % Change | | --------------------- | -------------- | -------------- | -------------- | -------- | | **ASSETS** | | | | | | Cash and Bank | 3,000,000 | 5,000,000 | +2,000,000 | +67% | | Loans Receivable | 12,000,000 | 15,000,000 | +3,000,000 | +25% | | Physical Assets | 2,000,000 | 3,000,000 | +1,000,000 | +50% | | **Total Assets** | **17,000,000** | **23,550,000** | **+6,550,000** | **+39%** | | | | | | | | **LIABILITIES** | | | | | | Member Savings | 14,000,000 | 18,000,000 | +4,000,000 | +29% | | **Total Liabilities** | **14,050,000** | **18,050,000** | **+4,000,000** | **+28%** | | | | | | | | **EQUITY** | | | | | | Retained Earnings | 2,500,000 | 3,000,000 | +500,000 | +20% | | Reserves | 450,000 | 1,000,000 | +550,000 | +122% | | **Total Equity** | **2,950,000** | **5,500,000** | **+2,550,000** | **+86%** | **Analysis:** * ✅ Assets grew 39% (strong growth) * ✅ Liabilities grew 28% (member deposits increasing) * ✅ Equity grew 86% (very strong profitability) * ✅ Reserves more than doubled (building safety cushion) * ✅ Loan portfolio expanded 25% (good lending activity) * ✅ Cash position improved significantly (+67%) **Conclusion**: Healthy growth with improving financial position. *** ## Using the Balance Sheet ### Monthly Board Reports **Package for board meetings:** ```http theme={null} GET /reports/balance-sheet?asOfDate=2026-06-30 GET /reports/profit-loss?startDate=2026-06-01&endDate=2026-06-30 ``` **Present:** * Balance sheet showing financial position at month-end * Profit & loss showing monthly performance * Key metrics (liquidity ratio, loan-to-savings ratio) * Trends vs prior month *** ### Year-End Closing **After closing accounting period:** ```http theme={null} GET /reports/balance-sheet?asOfDate=2025-12-31 ``` **Verify:** * Current Period Net Income = 0 (transferred to Retained Earnings) * Retained Earnings increased by net income * All income/expense accounts zeroed out * Balance sheet still balances *** ### Audit Preparation **For external auditors:** ```http theme={null} GET /reports/balance-sheet?asOfDate=2025-12-31 ``` **Provide:** * Year-end balance sheet * Supporting schedules for major accounts * Reconciliations (cash, loans, member savings) * Reserve policies and calculations *** ### Regulatory Reporting **For government filings:** ```http theme={null} GET /reports/balance-sheet?asOfDate=2025-12-31 ``` **Submit:** * Official balance sheet with organization letterhead * Signed by authorized officers * Include notes explaining accounting policies * Attach auditor's report if required *** ## Physical Assets Breakdown **Physical assets are categorized by acquisition method:** ### Cash Purchase **Assets purchased with organization funds:** ``` Office furniture: 1,500,000 RWF Computer equipment: 800,000 RWF Safe: 200,000 RWF Total: 2,500,000 RWF ``` **Journal entry:** ``` DEBIT: Fixed Asset (Cash Purchase) 2,500,000 RWF CREDIT: Cash 2,500,000 RWF ``` *** ### Collateral **Assets acquired from defaulted loans:** ``` Motorcycle (loan default): 300,000 RWF Total: 300,000 RWF ``` **Journal entry:** ``` DEBIT: Fixed Asset (Collateral) 300,000 RWF CREDIT: Loan Receivable 300,000 RWF ``` *** ### Gift **Donated assets:** ``` Donated computer: 200,000 RWF Total: 200,000 RWF ``` **Journal entry:** ``` DEBIT: Fixed Asset (Gift) 200,000 RWF CREDIT: Other Income 200,000 RWF ``` *** ## Reserve Allocations **Reserves are designated equity set aside for specific purposes:** **Example reserves:** ``` Emergency Fund: 800,000 RWF (for unexpected expenses) Loan Loss Reserve: 200,000 RWF (for bad debt write-offs) Building Fund: 0 RWF (savings for future building) Total Reserves: 1,000,000 RWF ``` **Each reserve appears as a separate line item** with its name and amount. **Purpose:** * ✅ Earmark funds for specific uses * ✅ Build safety cushion * ✅ Prepare for known future expenses * ✅ Demonstrate prudent financial management [Learn more about reserves →](/tontines/reserves/overview) *** ## Best Practices **Balance sheet best practices:** **Timing:** * ✅ Generate at month-end after all transactions posted * ✅ Review before closing accounting period * ✅ Compare to prior periods for trend analysis **Accuracy:** * ✅ Verify all transactions posted before generating * ✅ Ensure no draft entries pending * ✅ Reconcile major accounts (cash, loans, savings) * ✅ Verify isBalanced = true in response **Analysis:** * ✅ Calculate key ratios (liquidity, loan-to-savings) * ✅ Compare to prior periods * ✅ Investigate unusual changes * ✅ Review reserve adequacy **Distribution:** * ✅ Board members (monthly) * ✅ Management (monthly) * ✅ Members (annually with explanation) * ✅ Auditors (annually) * ✅ Regulators (as required) **Documentation:** * ✅ Keep copies of all distributed balance sheets * ✅ Archive year-end balance sheets permanently * ✅ Document unusual items or adjustments * ✅ Maintain supporting schedules *** ## Exporting **Export options (if supported by UI):** **PDF:** * ✅ Official distribution to board, members, auditors * ✅ Professional formatting with organization header * ✅ Signatures and date **Excel:** * ✅ Analysis and custom formatting * ✅ Ratio calculations * ✅ Comparative period analysis * ✅ Charts and visualizations **CSV:** * ✅ Import to accounting software * ✅ Data processing * ✅ Integration with other systems *** ## Related Topics Income and expenses for the period Accounting foundation for balance sheet Accounting principles behind reports Learn about reserve allocations Period closing and net income transfers