Statement of Financial Position

Statements of financial position for partnerships

Statements of financial position for partnerships

What is the layout of the statement of financial position of a partnership?

• The statement of financial position of a partnership is the same as that of a sole trader with the exception of the capital section

  • It first states the total assets

    • Non-current assets

    • Current assets

  • And then the total capital and liabilities

    • Capital

    • Non-current liabilities

    • Current liabilities

• The capital section of the statement of financial position shows the balances of each partner from their capital accounts and current accounts separately

• If the current account has a debit balance then:

  • Put brackets around the balance on the statement of financial position

  • Treat the number like a negative number

Do I need to show the full details for the current accounts?

• A question might ask you to show full details of the current accounts

• Start with the opening balances for each partner

  • Add the interest on capital

  • Add the salaries

  • Add the interest on loans

  • Add the profit shares

  • Less the drawings and the interest on drawings

  • Calculate the closing balances for each partner

  • Add together to give the combined balance for the current account