Statement of financial position
Also called: Balance sheet
What is a statement of financial position?
The statement of financial position lists what the business owns and owes at one date.
It shows non-current assets, current assets, current liabilities and non-current liabilities.
All the assets less all the liabilities are the net assets. Net assets always equal the owner's capital.
Example
Non-current assets are £12,000.00, net current assets are £7,000.00 and a long bank loan is £5,000.00. Net assets are £14,000.00, and so is the owner's capital.
Why it matters
It is the accounting equation set out as a statement. Its heading reads as at one date, because it shows one moment and not a whole year.
Practise it
Module, 5 rooms, all freeSole trader accounts
Practise it nowThe statement of financial position for a sole trader
Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].