Balance sheet is an integral part of the financial reports of a company. It is the snap shot of the state of affairs of the company at the end of its fiscal period. However, it does not necessarily reflect the true value of the company. Financial reports give a true and fair view of the company (FSA Handbook 2004) as the audit standard for financial reporting. Discrepancies arise because of the cost of accounting accuracy, the
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value of a company. I would argue that financial reports do not serve as a valuation of the company. While a further detail review is obviously needed for the proper evaluation of a company other than looking at the balance sheet, such as, at the very least, a review of the profit and loss statements, it does gives a straight, simple, and concrete estimate of the value of the company.
FSA Handbook Release 035 October 2004.