Statement of Financial Position

Blank format

Begin with a three-line heading (business name, "Statement of Financial Position", and "as at 31 December 20XX"). Arrange it as Non-current Assets, Current Assets, less Current Liabilities to obtain Working Capital, then Owner's Equity and Non-current Liabilities; use indentation and three RM money columns to separate individual items, subtotals and grand totals.

Parts of the format

Three-line heading

The first line is the business name, the second "Statement of Financial Position", and the third "as at 31 December 20XX" because this statement shows the position on a single date, not over a period.

Non-current Assets

Assets held for more than one year for business use such as premises, vehicles and fittings; listed first, usually in order of permanence.

Current Assets

Short-term assets easily converted to cash within a year such as closing inventory, debtors, bank and cash; arranged by liquidity (least to most liquid).

Current Liabilities and Working Capital

Liabilities due within a year (e.g. creditors) are deducted from current assets to obtain Working Capital, which shows the business's ability to pay short-term debts.

Owner's Equity

Opening capital plus net profit less drawings gives the closing capital; this represents the owner's net investment in the business.

Non-current Liabilities

Long-term debts settled after more than a year such as a bank loan; added to owner's equity, and the total must equal the net assets in the top section.

Filled example

Perniagaan Kasut Aiman, a sole proprietorship in Melaka, prepares its Statement of Financial Position as at 31 December 2024. The business has premises RM80,000, a vehicle RM30,000, fittings RM10,000, closing inventory RM12,000, debtors RM8,000, a bank balance RM5,000, cash RM2,000, creditors RM7,000 and a bank loan RM40,000; opening capital RM90,000, net profit RM25,000 and drawings RM15,000.

Common layout errors

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