Statement of Financial position

Statement of Financial Position - Calculates the net worth of a business by balancing what the business owns against what it owes

A statement of financial position is a snapshot of a business's net worth at a particular moment in time, normally the end of a financial year. It is a summary of everything that the business owns and owes.

Non-current assets : 

Are those items of value that are owned by the business and likely to stay within the business for more than 1 year.

• Tangible assets
  • They can be touched
    • premises
    • fixtures
    • fittings
    • equipment
    • vehicles
• Intangible assets
  • They cannot be touched
    • goodwill
    • brand name
    • patent

Current assets : 

Are those items of value owned by a business whose value is likely to fluctuate on a regular basis.

• Inventories - The value of stock held at that moment in time
• Trade receivables - People who owe the business money
• Prepayments - When an expense is made in advance of the period to which it relates
• Cash in the bank
• Cash in hand

Current Liabilities : 

Something owed by the business that should be paid back in under 1 year

• Overdrafts - The ability to withdraw money from a current account that you do not have
• Accruals - When an expense is paid after the…