The statement of financial position is another name for the balance sheet. It is one of the main financial statements and it reports an entity's assets, liabilities, and the difference in their totals. The amounts reported on the statement of financial position are the amounts as of the final moment of an accounting period.
The structure of the statement of financial position is similar to the basic accounting equation. For instance, a corporation will report amounts in the following format: Assets = Liabilities + Stockholders' Equity. A nonprofit organization's format will be: Assets = Liabilities + Net Assets.
The statement of financial position must reflect the basic accounting principles and guidelines such as the cost, matching, and full disclosure principle. Accordingly, the statement of financial position is more meaningful when it is prepared under the accrual method of accounting.
