The following are the 8 important points of differences between Balance Sheet and Statement of Affairs :
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1. A Balance Sheet shows assets at book values, while a Statement of Affairs shows assets at book values, as well as realizable value.
2. A Balance Sheet shows fictitious assets such as goodwill, prepaid expenses while a Statement of Affairs does not show such items.
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3. In a Statement of Affairs, creditors arc classified as unsecured, fully secured, partly secured and preferential creditors. No such classification is usually found in a Balance Sheet.
4. A Balance Sheet gives information about capital, profit or loss, drawings and interest on capital whereas a Statement of Affairs excludes all such items.
5. A Statement of Affairs shows the amount (i.e., deficiency) which the insolvent debtor is not able to pay to his creditors while a Balance Sheet does not show such a figure.
6. A Statement of Affairs is prepared on the date on which order of adjudication is passed against the debtor whereas a Balance Sheet is prepared usually at the end of each accounting period.
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7. A Balance Sheet of an individual or a partnership firm is not prepared according to any act whereas a Statement of Affairs is prepared according to the rules given in the Insolvency Acts.
8. A Balance Sheet shows assets and liabilities of a business as a going concern whereas a Statement of Affairs is prepared on the liquidation of the business of an insolvent and shows assets at realizable values and liabilities at their payable values.