7115 · 5.4
Statement of financial position
The **statement of financial position** (5.4) pairs with the income statement (5.3) — profit feeds **retained earnings**. Know what counts as an asset, a liability and capital.
Need to know
What you need to know
- Provides a financial 'snapshot' on a specific date (e.g., 'as at 31 December 2023').
- Formally lists a company's assets, liabilities, and equity.
- Also known as the Balance Sheet, as it must always balance.
- Essential for analysis by both internal (management) and external (investors, banks) stakeholders.
Explanation
Statement of financial position
- Provides a financial 'snapshot' on a specific date (e.g., 'as at 31 December 2023').
- Formally lists a company's assets, liabilities, and equity.
- Also known as the Balance Sheet, as it must always balance.
- Essential for analysis by both internal (management) and external (investors, banks) stakeholders.