A statement of financial position template explains the present value of all the assets of a company and the current balance of its liabilities at a certain date. Basically, it presents a clear picture of a company and its financial standing. For general purposes, it defines how its long-term and short-term assets can pay off its liabilities and, after paying them, how much left for the business to survive. Besides, it also includes information about the share of owners in terms of retained earnings. Usually, this statement is prepared at the end of an account period, which is a 12-month period starting from January to December or from July to June. Moreover, a statement of financial position is further accompanied by different other crucial statements. For instance, profit and loss statement, owner’s equity statement, new worth statement and expense consolidation statement.
Importance of statement of financial position:
The statement of financial position or condition template is a professional financial document that encapsulates the financial standing of a company by providing the market value of its assets, liabilities and earnings at a specific date. It provides a perfect way to analyze the financial health of a business before making any financial decision related to investment. Moreover, it is a consolidated balance sheet that enables shareholders to understand how much their investment has grown. This way, they can decide whether to keep their investment in this company or withdraw it. A statement of financial position is also known as a statement of assets and liabilities. Moving further, the assets side of this statement comprises cash balances, inventories, equipment, machinery, land and buildings. Whereas, the liabilities side consists of outstanding loan amounts, account payables, deferred amounts and shareholders’ equity.
Templates for Statement of Financial Position:
www.in.gov
www.in.gov
www.westpac.com.a