Personal Financial Statement Preparation

Personal financial statement preparation in corporate tax and accounting is a report documenting the financials of someone, general information, and a breakdown of assets and liabilities to track their financial goals, which could be used when they apply for credit. It’s like someone’s financial health check.

Again, with these items and tools tracked over time, they can be an advantage when you want to apply for credit (a loan, lease, or mortgage), as well as when you want to change your financial situation.

Here’s what else to know:

• Net worth is determined by subtracting a person’s liabilities from their assets. When there is more assets than liabilities, it is a positive net worth.
• As the values of assets and liabilities fluctuate, so does the net worth.
• Income and expenses may be included in a personal financial statement, but usually they are placed on a separate income statement.
• Business liabilities are included in a personal financial statement if an individual provides the creditor with a personal guarantee, which is similar to co-signing.

Assets are considered:

• Securities and funds held in checking or savings accounts
• Retirement account balances
• Trading accounts
• Real estate

Liabilities may include these debts:

• Personal loans
• Credit cards
• Student loans
• Unpaid taxes
• Mortgages

These items are not included in a personal financial statement:

• Business-related assets and liabilities
• Rented items
• Personal property, like furniture and household goods (although valuable property, such as jewelry and antiques, may be included with an appraisal)

If you would like to sit down with us to discuss how we can help you with your tax and accounting needs, contact us for a free consultation.