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Simple English definitions for legal terms
statement of financial condition
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A quick definition of statement of financial condition:
A statement of financial condition, also known as a balance sheet, is a document that shows how much money a person or company has, how much they owe, and how much they own. It helps to give a clear picture of their financial situation at a specific point in time. This statement includes information about assets (things they own), liabilities (things they owe), and owners' equity (the value of the company). It is different from an income statement, which shows how much money a person or company has earned and spent over a period of time.
A more thorough explanation:
A statement of financial condition is also known as a balance sheet. It is a financial statement that shows the current financial position of an entity. This statement discloses the value of the entity's assets, liabilities, and owners' equity.
For example, if a company has $100,000 in assets, $50,000 in liabilities, and $50,000 in owners' equity, the statement of financial condition would show these values. This statement is important for investors and creditors to understand the financial health of the entity.
The statement of financial condition is different from the income statement, which shows the entity's revenue and expenses over a period of time. The statement of financial condition is a snapshot of the entity's financial position at a specific point in time.
statement of financial affairs | statement of financial position