The statement of financial position (SFP) or balance sheet is one of the reports commonly presented to Council, Owners and managers for periodic review. This is often a confusing beast for those unfamiliar with it. Hopefully, after reading this article, the statement will be demystified and you will be able to read a statement of financial position with understanding.
In its simplest form, a SFP shows what assets (things of value) the Strata controls and who owns them. When someone else owns the assets those are called liabilities and when the Strata owns the assets that ownership is reflected in the fund balances (sometimes called ‘Owners equity’).
Unlike the statement of operations which shows how the Strata performed over a period of time, the SFP is like a snapshot and reports the financial health of the Strata at a point in time – the date stated at the top of the statement.
To read the rest of this article by Leo Van Wensem, CPA, CGA, download this PDF (published in the Winter 2015 edition of the CHOA Journal) [wp-svg-icons icon=”file-3″ wrap=”i”] CHOA Journal Winter 2015 – Balance Sheet (LVW).
This post has been prepared for general information purposes. It is not advice. The information presented may not fit your unique situation, please consult one of our trusted business advisors at RHN CPA for further clarification and interpretation of your circumstances.