Re: Statements of Financial Position (Re: Audited financial statements for 2023)

This is a very standard Statement of Financial Position and they all
look the same.

Unlike the monthly treasurer reports, which need to be completely
reworked for clarity, in this case it comes down to your observation
about accounting knowledge.

I suggest you read about the accounting equation; this web site is very
good: https://www.dwmbeancounter.com/

Basically, Assets = Liabilities + Equity

Let's say you have a house worth 1000k (assets), but you owe the bank
a 800k mortgage; that means your equity ("net worth") is 200k. 1000 =
800 + 200 In order words, you have a house but you also have debts, so
really your net worth is 200k.

Net Assets == Equity == (in personal finance) net worth

So, looking at SPI's 2023 financial statements, you see SPI has 2858k
worth of stuff (assets: cash, investments, hardware); that's the house
in the previous example. But SPI also has some payables (113k) and so
what belongs to SPI is 2745k (the math is 2858 - 113 = 2745).

To put this back in the accounting equation: 2858 = 113 + 2745 This
is what you'll see in the statement.

So, net assets are different to assets because of "debts" (we don't
have loans but there are obligations to pay certain things sometimes
and there was a big one at the end of 2023).

(Things have become more complicated from a reporting perspective when
we moved from the cash basis to the accruals basis a few years ago,
but it gives a more accurate view.)

Anyway, if you look at Net Assets, the 387k figure is SPI's General
Fund whereas the 2357k figure is funds held for projects. If you go
to the page, you'll see the fund report which shows the funds for each
project and the total matches the 2357k figure.

I hope that helps.

Martin

* Philippe Cloutier <chealer(at)gmail(dot)com> [2024-11-20 08:45]:
> Thank you very much one more time Dr Michlmayr,
>
> I just have a remark about presentation of our Statement of Financial
> Position (page 3): I do not know accounting, but find the last line ("Total
> Liabilities and Net Assets") very confusing. It does not explain how it
> differs from Total Assets.
>
> I find the page as a whole arguably misleading for putting more emphasis on
> "Total Liabilities and Net Assets" than on Net Assets. I believe the latter
> should have *at least* as much emphasis as the former.
>
> I know it is late for such a comment, but I did not see the statements
> before they were audited.
>
> Le 2024-11-19 à 21:55, Martin Michlmayr a écrit :
> > Audited financial statements for the year 2023 are available now:
> > https://spi-inc.org/treasurer/2023-financial-statements.pdf
> >
> > Form 990 for the year 2023 is also available:
> > https://spi-inc.org/treasurer/2023-990.pdf
> >
> > You can consider the 2023 reports under "Financial reports" at
> > https://spi-inc.org/treasurer/
> > as final now.
> >
> > Please let me know of there are any general questions. If there
> > are specific questions about your project, please contact
> > treasurer(at)spi-inc(dot)org
> >
> --
> This mail's original content (non-quoted parts) is available under the Creative Commons Attribution-ShareAlike License 4.0.
>
> Philippe Cloutier
> https://www.philippecloutier.com
>
>

--
Martin Michlmayr
Contractor, Software in the Public Interest, Inc.