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Statement of Financial Position / Balance Sheet Elements

Updated: Sep 1, 2019

The Statement of Financial Position (a.k.a Balance Sheet using Canadian ASPE accounting standards) presents the company's total assets, liabilities and the netted amount - called shareholder's equity.

Assets are resources that the entity owns (or effectively owns), to generate future economic benefit. Examples of assets are: cash, accounts receivable, inventories, properties, equipment, investments, etc..

Liabilities are financial or legal obligations that an entity may accrue over the course of doing business. Examples of liabilities include: accounts payable, bank loans outstanding and mortgages.

Shareholder's Equity represents how much the company's shareholders own, if assets were sold off to pay the company's liabilities.

Assets - Liabilities = Shareholder's Equity

In North America items are usually presented in order of liquidity, with the most liquid elements first. A sample statement of Financial Position/Balance Sheet, can be found, below.

* In ASPE standards, there is no concept of Accumulated and Other Comprehensive Income, so this category will not exist.

If there are assets that fall under both “current” and “non-current” (for example, certain inventory may be expected to be sold after 12 months, while others are expected to be sold within 12 months), the non-current portion should be disclosed in the Notes to the financial statements.

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