Statement of Financial Position

What is a Statement of Financial Position?

The statement of financial position is another name for the balance sheet, and is one of the main accounting statements. The statement shows a financial snapshot of the business at a specific point in time, usually at the end of an accounting period.

For presentation it can be shown vertically with assets above liabilities and capital, or horizontally with assets on the left and liabilities on the right. The statement of financial position must always balance and satisfy the basic accounting equation:

Assets = Liabilities + Capital

For further information on the statement of financial position see the Wikipedia definition.

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Last modified March 23rd, 2016 by Team

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