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

Total liability is what you owe, total asset is what you hold, and a net
asset is what you actually own.

Total asset is mathematically defined as net asset + total liability. So
they'll have same value, but are different things. Proving the mathematical
equation is true proves accounting had no glaring errors.

If you have 10 apples, promised to give out two, and think one of them will
be taken by sanitary vigilance, your total asset is 10, liability is 3 and
net asset is 7.

For profit companies may emphasize net asset because that's what you use
to, for example, distribute dividends. For NFP, a net asset is what wasn't
consumed yet by operations or is being reinvested. Usually however, both
receive the same emphasis, as the report is standardized in the whole world.

Last but not least, if you mean page 3, that's the column header.
Traditional balance has two columns, one for total assets and one for total
liabilities + net assets. When displaying everything as a single column,
you must emphasize the total liabilities + net assets so anyone reading
knows where the second column was supposed to start. Because, as I said
earlier, the report is standard in the whole world.

Regards,

Jonatas L. Nogueira (“Jesusalva”)
Vice President
Software in the Public Interest, Inc.

On Wed, Nov 20, 2024, 11:22 Philippe Cloutier <chealer(at)gmail(dot)com> wrote:

> 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
>
>
>
>