Personal Financial Statements

Question 1

Which Personal Financial Statements are required?

Answer 1

Required: Statement of Financial Condition (Statement of Changes in Net Worth is optional)

Question 2

How are assets and liabilities valued in a Personal Financial Statement?

Answer 2

Estimated current value

Question 3

How are estimated taxes that would be paid if all assets were converted into cash and all liabilities paid presented on a Personal Financial Statement?

Answer 3

Presented on Statement of Financial Condition between Liabilities and Net Worth

Question 4

What is the general presentation on a statement of financial condition?

Answer 4

“Assets
- Liabilities
- Estimated taxes on assets sold
: Net Worth”

Question 5

How is life insurance presented on a Personal Financial Statement?

Answer 5

“Only shown if there is cash surrender value

It is shown net of loans against the policy”

Question 6

How are business interests shown on a Personal Financial Statement?

Answer 6

Business Interests that constitute a large percentage of total assets should be separated from other investments

Question 7

What is the discreet view in an Interim Financial Statement?

Answer 7

“Interim period is a separate accounting period - not GAAP

Same accounting principles used for annual reporting should be used.”