STATEMENT OF

FINANCIAL
POSITION
ZYRIECE CAMILLE CENTENO
LEARNING
OBJECTIVES
At the end of the lesson, the learner must
be able to:
 Identify the elements of the statement of
financial position;
 Classify the elements of the statement of
financial position into current and
noncurrent items; and
 Prepare the statement of financial
position using report form.
ACCOUNTING EQUATION

ASSETS LIABILITIES EQUITY

01
ASSETS
CLASSIFICATION OF ASSETS

The Conceptual Framework for Financial

Reporting (IASB 2010) defines an assets as
a resource controlled by the entity as result
of past events and from which future
economic benefits are expected to flow to the
entity.
CLASSIFICATION OF ASSETS

CURRENT ASSETS
Classified and presented according to liquidity with
the most liquid followed by those with lesser
liquidity.

NONCURRENT ASSETS
Long term investments
 BUY SELL
INVENTORIES INVENTORIES

CUR RE NT A SSE T S
● A Retail Entity’s Normal Operating
Cycle

COLLECT CASH
 CURRENT ASSETS
1. CASH
 includes coins, currencies, checks, bank deposits, and other cash items
readily available for use in the operations of the business.

2. CASH EQUIVALENTS
 short-term investments that are readily convertible to known amounts
of cash which are subject to an insignificant risk to changes in value.

3. MARKETABLE SHARES
 stocks and bonds purchased by the enterprise and are to be held for only
a short span of time or short duration. They are usually purchased when
a business has excess cash.
 1.
2.
CURRENT ASSETS
3.
4.
5. TRADES AND OTHER
RECEIVABLES
01 ACCOUNTS 04 ADVANCES TO
RECEIVABLE
amount collectible from the customer EMPLOYEES
money loaned to employees payable in
on account or on credit cash or through salary deductions

02 NOTES
RECEIVABLE
promissory note issued by the client 05 ACCRUED
or the customer INCOME
income already earned but
not yet received
03 INTEREST
RECEIVABLE
interest collectible on promissory
notes
 CURRENT ASSETS
1.
2.
3.
4.
5.

6. INVENTORIES
 unsold goods at the end of the accounting period. This is applicable
only to merchandising business.

7. PREPAID EXPENSES
 supplies bought for use in the business or services and benefits to be
received by the business in the future made in advance
 CURRENT ASSETS
CONTRA-ASSET ACCOUNTS
are accounts deducted from the related asset accounts.

ALLOWANCE FOR BAD

DEBTS
losses due to uncollectible accounts

ACCUMULATED
DEPRECIATIONS
Expired cost of property, plant, and
equipment as result of usage and passage
of time
 NONCURRENT ASSETS
PROPERTY, PLANT, AND EQUIPMENT
are tangible assets that are held by the enterprise for use in
the production.

LAND EQUIPMENT
Piece of lot or real estate
owned by the enterprise

BUILDING FURNITURE AND

Edifice or structure used to
FIXTURES
accommodate the office, store,
or factory
 02
LIABILITIES
CLASSIFICATION OF CURRENT
LIABILITIES
Improvements to International Accounting Standards 1
(December 2003) classify a liability as a current liability
when it is:
 Expected to be settled in the entity’s normal operating cycle;
 Held primarily for the purpose of being traded; and
 Due to be settled within twelve months after the balance sheet
date; or the entity does not have an unconditional right to
defer the settlement of the liability for at least twelve months
after the balance sheet date.
 CLASSIFICATION OF CURRENT
TRADESLIABILITIES
AND OTHER PAYABLES:
ACCOUNTS NOTES PAYABLE INTEREST
PAYABLE
includes debts arising includes debts arising Is thePAYABLE
cost for borrowing
from purchase of an asset from purchase of an asset money. Principal amount
or acquisition of services or acquisition of services multiplied by time factor
on account. on account evidenced by a and interest rate.
promissory note.

UTILITIES ACCRUED INCOME TAX

is anPAYABLE
obligations to pay LIABILITIES
include amounts owed to PAYABLE
is computed at 30% of the
utility companies for others for expenses corporate taxable income.
services received from already incurred but not
them. yet paid.
NONCURRENT LIABILITIES

M O RT G A G E PAYA B L E
is the debt of the business with security of collateral
in the form of real properties.

B O N D S PAYA B L E
is a certificate of indebtedness under the seal of a
corporation, specifying the terms of repayment and
the rate of interest to be charged.
 Cash on Hand ₱ 200,000
Cash in Bank 250,000
Investment in Trading securities 75,000

PREPARATION OF Accounts Receivable

Allowances for Bad Debts
65,000
5,000
Notes Receivable 15,000
STATEMENT OF Interest Receivable
Advances to Employees
10,000
10,000
FINANCIAL Accrued Income
Merchandise Inventory
5,000
90,000

POSITION Supplies
Prepaid Insurance
25,000
70,000
Land 180,000
Building 500,000
Accumulated Depreciation -Building 20,000
Equipment 50,000
Accumulated Depreciation -Equipment 20,000
Furniture and Fixtures 10,000

Accounts Payable ₱ 250,000

Notes Payable 120,000
Accrued Expenses 60,000
Mortgage Payable 300,000
Loan Payable 100,000
Ren, Capital 680,000
PREPARATION OF
STATEMENT OF
FINANCIAL Current Assets

POSITION Cash
Investment in Trading Securities
5 ₱ 450,000
75,000
Trades and Other Receivables 6 100,000
Merchandise Inventory 90,000
Prepaid Expenses 7 95,000
Total Current Assets ₱ 810,000

Non-Current Assets
Property, Plant, and Equipment 8 700,000
Total Assets ₱ 1,510,000
PREPARATION OF
STATEMENT OF
FINANCIAL
POSITION
PREPARATION OF
STATEMENT OF
FINANCIAL
POSITION
 REN REN MERCHANDISING
Statement of Financial Position
December 31, 2015

     
ASSETS
Current Assets    
Cash   ₱ 450,000
Investment in Trading Securities   75,000
Trades and Other Receivables   100,000
Merchandise Inventory   90,000
Prepaid Expenses   95,000
Total Current Assets   ₱ 810,000
Non-current Assets    
Property, Plant, and Equipment   700,000
Total Assets   ₱ 1,510,000
 
LIABILITIES AND EQUITY
Current Liabilities    
Trade and other payables   ₱ 430,000
Non-current Liabilities    
Mortgage Payable ₱ 300,000  
Loan Payable 100,000
Total Non-current Liabilities   400,000
Total Liabilities ₱ 830,000
Owner’s Equity    
Ren, Equity   680,000
Total Liabilities and Equity   ₱ 1,510,000
THANK
S!
www.facebook.com/centenozyriece.19
www.instagram.com/zyriece_camille
www.twitter.com/zyriece_camille

CREDITS: This presentation template was created by

Slidesgo,including
Slidesgo, includingicons
iconsbybyFlaticon,
Flaticon,and
infographics &
infographics
images by Freepik
& images by Freepik

Please keep this slide for the attribution