The balance sheet on Form 990 provides the IRS with an overview of your organization’s financial position at the beginning and end of the tax year. It reflects the foundation’s assets, liabilities, and net assets or fund balances, giving insight into its overall financial health and the changes during the year.
The balance sheet contains three sections.
- Assets – They represent anything owned by the organization that has value.
- Liabilities – Any debts or obligations the foundation owes.
- Net Assets or Fund balances – Assets remaining after subtracting liabilities from the assets.
The total assets reported must match the combined value of Total liabilities and the Total net assets or fund balances.
| Total Assets (Line 16) = Total liabilities and net assets/fund balances (Line 33) |
Assets:
Total assets on Line 16: Add the totals in columns (A) and (B) of lines 1 through 15.
- Beginning of the Year(Column A) = $12,000
- End of Year(Column B) = $120,000
Note: If there are no assets in Column A or Column B, leave Lines 1-15 blank on the appropriate columns.
Liabilities:
Total Liabilities on Line 26: Add the totals in columns (A) and (B), lines 17 through 25.
- Beginning of the Year(Column A) = $4,000
- End of the Year(Column B) = $40,000
Note: If there are no liabilities in Column A or Column B, leave Lines 17-25 blank on the appropriate columns.
Net Assets or Fund Balances:
The organizations that follow FASB ASC 958 guidelines should complete Line 27 and Line 28. Organizations not following FASB ASC 958 guidelines should complete Lines 29, 30, and 31.
The total of these sections will be displayed in Line 32.
In this example, the information is filled for the organization that does not follow FASB ASC 958 guidelines,
Total net assets or fund balances on line 32: The total of lines 27 through 28
- Beginning of the Year(Column A) = $8,000
- End of the Year(Column B) = $80,000
Total liabilities and net assets/fund balances: Line 33
Line 33 will display the combined value of Total Liabilities and Total net assets or Fund balances.
| Line 33 = Total Liabilities (Line 26) + Total net assets or fund balances (Line 32) |
Therefore,
Total Assets(Line 16) = Total liabilities and net assets/fund balances(Line 33)
After completing the balance sheet we have to complete the Reconciliation of Net Assets(Part XI) and find Net assets and Fund balances at the end of the tax year.
In Part XI, you need to give the Total revenue, Total expenses, and Net assets or fund balances at the beginning of the year.
Total Revenue and Total Expense:
Taxzerone will prefill this amount from Part VIII, column (A), line 12, and Part IX, column (A), line 25, respectively.
- Line 1 = Total Revenue (Part VIII, Line 12 Column(A)
- Line 2 = Total Expenses (Part IX, Line 25 Column (A)
With the value you have entered on Part XI,Line 1 and Line 2,The value will be calculated in Line 3. Line 3 will display the difference between Total revenue for the tax year and Total expense.
Net assets or fund balances at the beginning of the year:
Taxzerone will pre-file this value from Part X, line 32, column (A).
Line 4 = Total net assets or fund balances (Part X, Line 32 Column (A)
You can enter any investments or expenses on Lines 5 through 9 of Part XI that are not included in Part VIII and Part IX.
Net assets or fund balances at the end of the year: Line 10
The Net assets or fund balances at the end of the tax year will be calculated with the value entered on Line 3 through Line 9 of Part XI,
| Line 10 = Sum of Line 3 through Line 9 |
The calculated amount on Line 10 of Part XI must match the balance sheet’s net assets or fund balances at the end of the year.
The values in the balance sheet and Reconciliation are now balanced; therefore, we’ve completed the Balance Sheet and Reconciliation of Net assets.
Last modified: December 19, 2025
