Net assets: Difference between revisions
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''Financial reporting.'' | ''Financial reporting - balance sheet.'' | ||
Net assets are equal to Total assets | Net assets are equal to Total assets MINUS Total liabilities. | ||
:<span style="color:#4B0082">'''''Example: net assets calculation'''''</span> | |||
:Other assets are 70. | |||
:Cash is 30. | |||
: Total assets = Other assets + Cash = 70 + 30 | |||
:Total assets = '''100''' | |||
:Debt is (40) | |||
:Other liabilities are (10) | |||
:Total liabilities = Debt + Other liabilities = (40) + (10) | |||
:Total liabilities = '''(50)''' | |||
:Total assets - Total liabilities = 100 - 50 | |||
:Net assets = '''50''' | |||
Net assets are also equal to the book value of equity, also known as shareholders' funds. | |||
The book value of total equity is equal to the book value of the company's net assets. | |||
These two items in a balance sheet always balance - so long as there are no errors. | |||
This is what is meant by a balance sheet "balancing". | |||
== See also == | == See also == | ||
* [[Assets]] | * [[Assets]] | ||
* [[Balance]] | |||
* [[Balance sheet]] | |||
* [[Book value]] | |||
* [[Equity]] | * [[Equity]] | ||
* [[Financial reporting]] | * [[Financial reporting]] | ||
Latest revision as of 16:16, 18 July 2022
Financial reporting - balance sheet.
Net assets are equal to Total assets MINUS Total liabilities.
- Example: net assets calculation
- Other assets are 70.
- Cash is 30.
- Total assets = Other assets + Cash = 70 + 30
- Total assets = 100
- Debt is (40)
- Other liabilities are (10)
- Total liabilities = Debt + Other liabilities = (40) + (10)
- Total liabilities = (50)
- Total assets - Total liabilities = 100 - 50
- Net assets = 50
Net assets are also equal to the book value of equity, also known as shareholders' funds.
The book value of total equity is equal to the book value of the company's net assets.
These two items in a balance sheet always balance - so long as there are no errors.
This is what is meant by a balance sheet "balancing".
