8.1 Statement of Financial Position
8.1.1 The Introduction of Statement of Financial Position
The statement of financial position shows the composition of assets and liabilities, the relative proportions of debt and equity financing and the amount of earnings that you have had to retain. The statement of financial position shows what the business has(assets) and what the business owes against those assets(liabilities).
The statement of financial position also provides the business with information on how best it is able to pay its debts.
8.1.2 How to Prepare a Statement of Financial Position
ABC Company
STATEMENT OF FINANCIAL POSITION AS at 31 DECEMBER 20X9
$'000 $'000
Assets
Non-current assets
Property, plant and equipment X
Intangible assets X
X X
Current assets
Inventories X
Trade receivables X
Other current assets X
Cash and cash equivalents X
X
X
Total assets X
Equity and liabilities
Equity
Share capital X
Retained earnings X
Other components of equity X
X
Non-current liabilities
Long-term borrowings X
Long-term provisions X
X
Current liabilities
Trade and other payable X
Short-term borrowings X
Current portion of long-term borrowings X
Current tax payable X
Short-term provisions X
X
Total equity and liabilities X
