It is April 2026. Bill has been running the ledger for two years. He wants to read the full picture before the system publishes its next entry.
He builds his balance sheet.
Assets: cash in current account, 2,284 euro. Index fund opened in March, current value approximately 3,045 euro after one month of market movement. Security deposit held by landlord, 1,200 euro. Smartphone purchased in July 2024, book value after 21 months of depreciation at 11 euro per month, 169 euro. Total assets: 6,698 euro.
Liabilities: zero financial debt. The lease obligation for the remaining four months of the current lease, 2,400 euro, is an operating commitment. Under IFRS 16 it would appear as a lease liability. In a personal balance sheet, Bill notes it but does not classify it as a financial liability.
Balance sheet composition is the analysis of what an entity owns, owes, and has built. Bill started with 1,000 euro in April 2024. Two years later he has assets of 6,698 euro, zero financial debt, and a monthly surplus that continues to build.
The ledger has been running for exactly two years. The composition is more interesting than the total.
The tip
Build a full balance sheet at least once a year. The total net assets figure matters less than the composition: what is liquid, what is illiquid, what is recoverable, and what is truly at risk. Each category tells a different story.
Balance sheet composition, April 2026: total assets 6,698 (cash 2,284, index fund 3,045, deposit 1,200, smartphone book value 169). Total financial liabilities: 0. Net assets: 6,698. Two years from 1,000.
Bill is 26. Every episode, we read his personal ledger through accounting eyes. / FY 2026 ledger