In accounting, the balance sheet and income statement are two essential documents,
but complementary: one offers photography at time T,
the other traces the performance film over the full financial year.
What does each document measure?
Photograph of the patrimonial situation at a given date.
Assets - what the company owns.
Liabilities - what it owes.
Shareholders' equity - net resources.
Film of performances over a period - usually the financial year.
It traces the products (revenue) and expenses (expenses)
and determines the result (profit or loss).
"The balance sheet says what it's worth the company at a given time;
the income statement what it has produced over a period of time.Fundamental principle - OHADA accounting law
Temporality & Role
| Criteria | Balance sheet | Income statement |
|---|---|---|
| Nature | Document de stock - état patrimonial | Document de flux - economic performance |
| Temporality | Balance at 12/31 (or closing date) | Flows between opening and closing dates |
| Main role | Solvency measurement, financial structure and investment capacity | Measuring profitability and operations |
| Key components | Assets - Liabilities - Shareholders' equity | Income - Expenses - Net income |
| Question asked | What do I own? What do I need? | Did I make a profit this year? |
OHADA legal framework
Cameroon applies the OHADA Accounting System (SYSCOHADA),
in force since January 1, 2018 in the Organization's seventeen member states
for the Harmonization of Business Law in Africa. This reference harmonizes
mandatory financial documents, including balance sheet and income statement.
SYSCOHADA Mandatory financial documents
All entities subject to OHADA law are required to prepare, at the close of each financial year
the annual financial statements, including Balance sheet,
the Income statementthe Cash flow statement
and Notes to the financial statements. These documents must give a true and fair view of
the entity's assets and liabilities, financial position and results of operations.
