Characteristics of Statement of Financial position

Characteristics of Statement of Financial position

In this article, we would explain the characteristics of the statement of financial position. Characteristics of financial statement can be explained in terms of financial position, list of assets and liabilities etc.

Some important Characteristic of Statement of financial position have been described below

1.   Reflection of Financial Position

First important characteristic of Statement of financial position is showing the financial position of the company.

2.   Asset & liabilities List

Another important characteristic of Statement of financial position is description of the asset & liabilities. Thus we can say that statement of financial position shows the status of assets & liabilities. The assets & liabilities are divided into different sections.

3.   Specific Date Position:

Another important characteristic of Statement of financial position is reflection of financial position on a specified or particular date. While statement of comprehensive income shows the performance during the year.

4.   Classification of Assets & liabilities

In statement of financial position the Liabilities and are classified into current & noncurrent section. Some important characteristics of current liabilities are listed below

a)    Liability to be settled within operating cycle.

b)   Liability is primarily held for trading purposes.

c)    Liability is required to be settled within 12 months, or

d)   All other liabilities are classified as noncurrent.

Similarly the following asset are classified as current assets

a)    Asset expected to released or consumed during operating cycle.

b)   Assets that are primarily held for trading purposes.

c)    Asset released/consumed within 12 months of balance sheet date.

d)   Cash & cash equivalent (not restricted).

  

5.   Asset on Face of Statement of Financial position

Statement of financial position will show the following items on face of statement of financial position.

a)    Property, Plant and Equipment.

b)   Investment properties.

c)    Intangible assets.

d)   Long term financial assets.

e)    Investment under equity method.

f)     Biological assets.

g)   Inventories.

h)   Trade receivables.

i)     Cash & Cash equivalent.

6.   Liabilities on Face of Statement of Financial position

Minimum of following items are shown on the face of the statement of financial position.

a)    Trade Payable.

b)   Provisions.

c)    Financial liabilities.

d)   Liabilities for current asset.

e)    Deferred tax liabilities.

f)     Issued capital & reserves attributed to equity.