A Personal Financial Statement sometimes called a personal balance sheet, is a document that details your current financial status. The main factors are your total assets and your total liabilities, which, when subtracted from each other, equal your total net worth.

Financial statements can also sometimes include the assets and liabilities of spouses to reach a combined net worth. This is commonly seen when spouses are combining finances, like if they are applying for a business loan together to fund a startup.

A Personal Financial Statement is also known as a:

• Personal Balance Sheet
• Personal Income Statement
• Statement of Assets and Liabilities
• Net Worth Statement

You should include all of your assets and liabilities on your financial statement to give an accurate portrayal of your financial situation.

Some examples of assets include:

• Cash in your bank accounts
• Brokerage accounts
• IRA, 401(k), and other retirement savings accounts
• Investments
• Accounts receivable and other income streams
• Business inventory and equipment
• Land or real property (without liens)
• Special items of value like antiques and jewelry, if applicable

Some examples of liabilities include:

• Credit card debt
• Car loans
• Mortgages
• Accounts payable and other goods or services purchased on credit
• Unpaid taxes
• Child support payments
• Any other liens, like money owing from a small claims judgment

There are several situations that require personal financial reporting.

For example, if you are starting a business and require a loan, your bank will likely review your income statement to gauge your financial situation and determine what kind of interest rates you're eligible for.

The statement's purpose is to allow the bank or loan company to see what kinds of assets you have to evaluate the risk of lending to you.

Other situations that sometimes require a financial statement include:

• Applying for a lease or mortgage
• Developing a financial plan for your estate or retirement
• Developing a strategy to reduce income taxes
• Identifying property during a separation or divorce proceeding