10.1.2—Statement of financial position

The statement of financial position reports assets, liabilities and equity at a point in time. It shows what the business controls or is owed and how those resources are financed.

Current and non-current categories help assess liquidity, solvency and capital structure. The statement is a snapshot, so timing and valuation matter.

A business may own equipment financed by a loan; assets and liabilities rise together, while retained profit changes equity.

The statement does not show future cash flow or the market value of every resource, and “net assets” is not the same as cash.