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

From: Jeremy Stanley <fungi(at)yuggoth(dot)org>
To: spi-general(at)lists(dot)spi-inc(dot)org
Subject: Re: Statements of Financial Position (Re: Audited financial statements for 2023)
Date: 2024-11-20 14:36:59
Message-ID: Zz30CwUsZcvIQngA@yuggoth.org
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On 2024-11-20 08:45:49 -0500 (-0500), Philippe Cloutier wrote:
[...]
> 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 too am no accountant, but my understanding is that assets refers
to things of value which are owned while liabilities are what is
owed. The net difference (totaled liability amounts subtracted from
totaled asset values) is "net assets." In a sense, if the
organization were to be liquidated, assets would be sold off to
cover outstanding liabilities, and what's left over is the "net
assets" which is essentially the estimated liquidation value at that
time.
--
Jeremy Stanley

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