Financial statements are documents containing records of the various financial activities of any company. However, personal financial statements indicate the financial health of an individual.
Personal financial statements can be of immense help for individuals seeking loans, for carrying out important transactions, for planning out investments. The personal financial statements are usually worked out by accountants, who are certified. They are referred to as CPAs. The certified public accountants, conduct reviews, audits and issue complied reports pertaining to personal financial statements.
Personal financial statements, prepared by the CPAs, compile the report as per guidelines of the SSARS (SS Accounting And Review Services) and GAAS (Generally accepted auditing standards).
Personal Financial Statements – Facilities:
An individual possessing personal financial statements can avail of the following facilities:
Reduce the burden of income tax
The report can be used to make a guarantee
For fulfilling the eligibility criteria of a co operative body
Working out plans with respect to finances, retirement schemes and real estate investments
In the event of a divorce ( in process), property identification can be carried out for the purpose of alimony
In personal financial statements, the clients are always advised by the accountants to divulge current liabilities and assets. Accountants usually prefer working on current information rather than working on past details of liabilities and assets.
The following information is required to be furnished while preparing a personal financial statement:
Information about the individuals mentioned in the financial statement.
The procedure followed in evaluating the present values of liabilities and assets.
If the assets are owned by more than one individual, the details of the joint holder is also provided.
Nature of investment portfolio. If assets are in more than one company, the details of the industries or companies are provided.
Detailed information about rates of interest, collateral, maturities, debts, receivables, credits, deductions, categories of liabilities and assets, operating losses, operating leases are also taken into account.
Last Updated on : 26th June 2013