What is a Condensed Balance Sheet?

A condensed balance sheet is a statement of changes in financial position that is presented in a highly aggregated format. This form of presentation may be used in combination with a complete set of condensed financial statements, when the intent is to present just the highlights of an entity’s assets, liabilities and equity.

Disadvantages of a Condensed Balance Sheet

A potential problem with the condensed balance sheet format is that the level of summarization hides information that might otherwise have been visible if additional line items had been presented. The high level of summarization might also aid someone committing financial reporting fraud, since there is too little information for anyone to discern the nature of the fraud. This format also makes it impossible to conduct any ratio analyses, since there are few asset, liability, or equity line items that could be incorporated into a ratio.