Chapter 41. PERSONAL FINANCIAL STATEMENTS
William B. Boles, CPA/ABV, ASA, CFP
Lisa A. Ritter, CPA, CFE
Brent W. Emrick, CPA/ABV, MBA, CFP
Michael W. Zelko, CPA/ABV
Boles Metzger Brosius & Ritter PC
Boles, Metzger, Brosius & Ritter, PC is located in Harrisburg, PA. Lisa Ritter, CPA, CFE is a member of the firm's executive committee and a member of the AICPA's Auditing Board. Bill Boles and Brent Emrick are partners in the Firm, Mike Zelko is manager of the firm's Business Valuation Department.
WHAT ARE THEY? AND WHY DO WE NEED THEM?
(a) WHAT IS A PERSONAL FINANCIAL STATEMENT?
A standard definition of a personal financial statement is: a listing of everything owned or owed presented in a uniform way so that the user of the statement can understand it.
A personal financial statement presents the personal assets and liabilities of an individual, a husband and wife, or a family. It is not a financial statement on a business owned by the person; however, it does contain important information about such business interests.
The essential purpose of a personal financial statement is to measure wealth at a specified date—to take a snapshot of the person's financial condition. It does this by presenting:
Estimated current values of assets
Estimated current amounts of liabilities
A provision for income taxes based on the taxes that would be owed if all the assets were liquidated and all the liabilities paid on the date of the statement
Net worth
Although both personal and business financial statements are ...
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