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what is
Marshalling?
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Answer Posted / savi
Marshalling denotes the order in which assets and
liabilities are shown in the Balance Sheet. Items are
marshalled either in the way of liquidity or in the order of
permanence.
The order of liquidity means, the order in which assets can
be converted into cash. Cash being the most liquid item
shown as the first item and goodwill being the least liquid
item is shown as the least one. The liabilities are shown
in the order of discharge-ability, priority or urgency to
pay. the most urgent liability is shown first and the least
urgent to pay is shown last.
Under the order permanence, permanent assets and liabilities
are shown first followde by current assets and liabilities.
The order of permanence is just the reverse of the order of
liquidity.
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