Statement of Financial Position

Statements of financial position for clubs & societies

Statements of financial position for clubs & societies

What is the layout of the statement of financial position of a club or society?

• The statement of financial position for clubs and societies is prepared in a similar way to other types of businesses

• The statement is split into assets and liabilities

• The main difference is the capital/equity section is replaced with an accumulated fund section

What is an accumulated fund?

• The capital of a club or society is referred to as the accumulated fund

  • This is made up of

    • any capital which is invested into the organisation

    • the accumulation of surpluses of income over expenditure over time

• At the end of each year

  • A surplus is added to the accumulated fund

  • A deficit is subtracted from the accumulated fund

How do I calculate the accumulated fund?

• If the accumulated fund is not given in the question, you will need to calculate it by using the accounting equation

  • Assets = Capital + Liabilities

• Accumulated fund is the capital so the equation becomes:

  • Assets = Accumulated fund + Liabilities

• Use the two known elements of assets and liabilities to find the accumulated fund

  • Accumulated fund = Assets - Liabilities

How do I use the accumulated fund to calculate surplus or deficit?

• To calculate the surplus or deficit for the year:

  • Calculate the accumulated fund at the start of the year

  • Calculate the accumulated fund at the end of the year

  • Calculate the change in the accumulated fund

    • If it has increased then this is the surplus

    • If it has decreased then this is the deficit