Clarity of financial statements regarding net assets (Re: Audited financial statements for 2023)

Le 2024-11-20 à 20:27, Martin Michlmayr a écrit :
> * Philippe Cloutier <chealer(at)gmail(dot)com> [2024-11-20 11:27]:
>> Yes, I am not entirely clueless about accounting; what I meant is
>> that I don't have (significant) education about it and have never
>> been involved in the production of such statements. What I was
>> talking about is the emphasis on "Total Liabilities and Net Assets"
>> (the house's value) rather than net assets (what actually belongs to
>> SPI and its projects).
> It's because of the accounting equation: Assets = Liabilities + Equity
>
> While "Assets" and "Liabilities and Net Assets" are on the same page,
> a better way to image it is "Assets" on the left side and "Liabilities
> and Net Assets" on the right side and both sides have to match (as per
> the accounting equation).
>
> In any case, to answer your question, this is a standard way to
> present financial statements.
>
> If you look at e.g. Mozilla (prepared by a different accounting firm),
> you see exactly the same:
> https://assets.mozilla.net/annualreport/2022/mozilla-fdn-2022-fs-final-0908.pdf
> (page 5)
>
> Or Tor: https://www.torproject.org/static/findoc/2021-2022-The_Tor_Project-AuditedFinancialStatements.pdf?h=1fe92666
> (page 11), prepared by yet another accounting firm.
>
> So, rest assured, SPI's report is following accounting norms.

Yes, I'm sorry if that wasn't clear, but neither the exactitude nor the
validity of the report are the matter. This is really about clarity and
I fully agree that the confusion is not specific to SPI. I'd even say
both of the examples you mention are worse.

As for potential improvements, Mozilla's document titles the second
statement close to my suggestion: "Consolidated Statement of Activities
and Change in Net Assets".

>
> For most projects, the last page in SPI's financial statements (the
> fund report) is probably the most interesting one anyway.
>
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Philippe Cloutier
https://www.philippecloutier.com