Statement of financial position

Statement of Financial position (SOFP)

The SOFP is a snapshot of a company’s assets, liabilities and capital at a certain point in time. The equity should equal the difference between total assets and total liabilities.

The SOFP consist of:

  1. Assets– Current Assets (eg Cash, Receivables), Non-Current Asset (eg Buildings, plants)
  2. Liabilities– Current liabilities (eg Payables), Non-current liabilities (eg Loans)
  3. Capital– Retained earnings

Current Assets

An item is a current asset when:

  • Asset is primarily for trading purposes and short-term and within 12 months of the reporting period.
  • In the form of cash or an asset equivalent to cash. Current assets include inventories, receivables and marketable securities expected within 12 months.

An example of a current asset is:

  • Cash
  • Receivables
  • Inventory

Current Liabilities

Primarily for the purpose of trading and settled within 12 months after reporting period. The payments cannot be deferred to after a year. Current Liabilities include Bank overdraft, payables and accruals.

Non- Current Liabilities

Payments Settled after 12 months and usually include loans, bonds etc.

Non-current Assets

Assets used within an organisation for more than a year such as buildings, plant and machinery.


  • Primarily used for production or supply of goods or services.