What is Grouping and Marshalling?

Grouping and Marshalling



In accounting, Grouping refers to presenting similar items with similar qualities together. They are shown under a common head inside financial statements. For example, let’s say a company has 200 different creditors that it deals with. All of them will not be shown separately in financial statements, only the net total of all the creditors will be presented.

Another example would be of Stock which shows the net total of (Raw Material + Work In Progress + Finished Stock).



Arrangement of assets and liabilities in the balance sheet in proper order is called Marshalling. The assets, liabilities and capital in a balance sheet must be properly marshalled and shown in a logical order. There are 2 common ways of Marshalling:


  • By Liquidity

Assets are arranged in order of liquidity i.e. they can be converted to cash easily. Most liquid assets, such as cash, will come first and least liquid assets, such as building, will come last. Liabilities are arranged in the order they are to be discharged.


Sample Format of a Balance Sheet in Order of Liquidity

 Liabilities   Amt  Assets  Amt
 Bills Payable  xxxx  Cash  xxxx
 Creditors  xxxx  Bank   xxxx
 Loans  xxxx  Govt. Securities  xxxx
 Outstanding Expenses  xxxx  Other Investments  xxxx
 Reserves & Surplus  xxxx  Bills Receivable  xxxx
 Capital  xxxx  Debtors  xxxx
     Stock  xxxx
     Furniture  xxxx
     Plant & Machinery  xxxx
     Building  xxxx



  • By  Permanence

Assets are arranged in order of permanency i.e. with the most permanent on the top and the most liquid on the bottom. Liabilities which have to be discharged last are shown first and those which have to be discharged first are shown last.


Sample Format of a Balance Sheet in Order of Permanence

 Liabilities   Amt  Assets  Amt
 Capital  xxxx  Building  xxxx
 Reserves & Surplus  xxxx  Plant & Machinery  xxxx
 Outstanding Expenses  xxxx  Furniture  xxxx
 Loans  xxxx  Stock  xxxx
 Creditors  xxxx  Debtors  xxxx
 Bills Payable  xxxx  Bills Receivable#  xxxx
     Other Investments  xxxx
     Govt. Securities  xxxx
     Bank   xxxx
     Cash  xxxx