Statement of financial position
In one sentenceA statement showing the business's assets, liabilities and equity on a specific date, also called the balance sheet; its two sides are always equal.
Simply put
It is a picture of the business on one day, usually the last day of the fiscal year. It shows what it owns (assets), what it owes to others (liabilities), and what is left for the owners (equity).
Assets and liabilities are usually split into current (within a year) and non-current, which helps you measure liquidity quickly.
Worked example
An auto parts store at year end: its current assets (cash, inventory and receivables) are 700,000 SAR, its non-current assets (equipment and vehicles) are 800,000 SAR, and its liabilities are 600,000 SAR.
Current assets700,000
Non-current assets800,000
Total assets1,500,000
Total liabilities(600,000)
Equity = 1,500,000 − 600,000900,000 SAR
Formula: Assets = liabilities + equity
Don't confuse it with
BudgetThe balance sheet shows the actual position on a past date, and the budget is a plan for the future.
in FullScreen ERP
The final statements in the system include the trial balance, the income statement and the financial position. General accounts