STATEMENT OF FINANCIAL POSITION

 – also known as the ‘balance sheet’, this statement includes the amounts of the company’s total
assets, liabilities, and owner’s equity which in totality provides the condition of the company on
a specific date. (Haddock, Price, & Farina, 2012)
THREE MAIN COMPONENTS OF A STATEMENT OF FINANCIAL POSITION:
 ASSETS - Something that entity owns or controls in order to derive economic benefits
from its use
 LIABILITIES - Are depts of the entity or obligations that a business owes to someone.

 OWNER’S EQUITY – Capital of businesses

• Current Assets – are assets that can be realized (collected, sold, used up) one year after year-
end date.
• Noncurrent Assets – are assets that cannot be realized (collected, sold, used up) one year after
year-end date.
 CURRENT ASSETS EXAMPLE
 Cash – Includes bills and coins on hand, bank accounts, and operating funds.
 Cash equivalent – short term, highly liquid investments that are readily
convertible to known amount of cash and which are subject to an insignificant
risk of changes in value.
 Notes Receivable
 Accounts Receivable
 Inventories
 Prepaid Expenses
 NON-CURRENT ASSETS EXAMPLE
 Property, Plant and Equipment
 Intangible Assets
 Biological Assets
 Long Term Investment
• Current Liabilities – are liabilities that fall due (paid, recognized as revenue) within one year
after year-end date.
• Noncurrent Liabilities – are Liabilities that do not fall due (paid, recognized as revenue) within
one year after year-end date.
 CURRENT LIABILITIES
 Accounts Payable
 Notes Payable
 Interest Payable
 Accrued Liabilities
 Unearned Revenues
 NON-CURRENT LIABILITIES
 Mortgage Payable
 Bonds Payable
• PERMANENT ACCOUNTS - as the name suggests, these accounts are permanent in a sense that
their balances remain intact from one accounting period to another.
 EXAMPLES of permanent account include Cash, Accounts Receivable, Accounts Payable,
Loans Payable and Capital among others.
 They called it PERMANENT ACCOUNTS because the accounts are retained permanently
in the SFP until their balances become zero.
• Statement of Comprehensive Income (SCI) - Temporary accounts unlike permanent accounts
will have zero balances at the end of the accounting period.
• Report Form - is a form of the SFP that shows asset accounts first and then liabilities and
owner’s equity accounts after. (Haddock, Price, & Farina, 2012)
• Account Form – a form of the SFP that shows assets on the left side and liabilities and owner’s
equity on the right side just like the debit and credit balances of an account.