Personal financial statement

A personal financial statement is a type of balance sheet that is prepared for an individual. This document contains the following sections:

  • Assets. The assets section contains the estimated fair values of all assets owned by the individual, presented in their order of liquidity.
  • Liabilities. The liabilities section contains the estimated fair values of all liabilities for which the person is liable, presented in their order of liquidity.

The personal financial statement should have an accompanying set of disclosures. Examples of these disclosures are:

  • The methods used to derive the estimated fair values of assets and liabilities.
  • A description of any arrangements where assets are jointly owned with another party.
  • The methods and underlying assumptions used to derive the estimated income tax liability.
  • The maturities of any accounts receivable or debts payable.

The personal financial statement is used when applying for loans, so that the prospective lender has a complete view of the financial situation of the applicant.