Net assets and Net credit/debit position: Difference between pages

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imported>Doug Williamson
(Expand definition.)
 
imported>Doug Williamson
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''Financial reporting - balance sheet.''
''Netting systems''.


Net assets are equal to Total assets MINUS Total liabilities.
A participant’s net credit or net debit position in a netting system is the sum of the value of all the transfers the participant has received up to a particular point in time, minus the value of all the transfers the participant has sent.


If the difference is positive, the participant is in a net credit position. 


:<span style="color:#4B0082">'''''Example: net assets calculation'''''</span>
If the difference is negative, then the participant is in a net debit position.


:Other assets are 70.


:Cash is 30.
The net credit or net debit position at settlement time is defined as the net settlement position.


: Total assets = Other assets + Cash = 70 + 30
These net positions may be calculated on a bilateral or multilateral basis.
 
:Total assets    =        '''100'''
 
 
 
:Debt is (40)
 
:Other liabilities are (10)
 
:Total liabilities = Debt + Other liabilities = (40) + (10)
 
:Total liabilities  =      '''(50)'''
 
 
:Total assets - Total liabilities = 100 - 50
 
:Net assets      =        '''50'''
 
 
Net assets are also equal to the book value of equity, also known as shareholders' funds.
 
 
The book value of total equity is equal to the book value of the company's net assets.
 
These two items in a balance sheet always balance - so long as there are no errors.
 
This is what is meant by a balance sheet "balancing".




== See also ==
== See also ==
* [[Assets]]
* [[Credit]]
* [[Balance sheet]]
* [[Debit]]
* [[Book value]]
* [[Netting]]
* [[Equity]]
* [[Financial reporting]]
* [[Goodwill]]
* [[Group accounts]]
* [[Liabilities]]
* [[Minority interest]]
* [[Net worth]]
* [[Non-controlling interest]]
* [[Return on assets]]
* [[Return on net assets]]
 
[[Category:Accounting,_tax_and_regulation]]

Revision as of 08:24, 11 April 2015

Netting systems.

A participant’s net credit or net debit position in a netting system is the sum of the value of all the transfers the participant has received up to a particular point in time, minus the value of all the transfers the participant has sent.

If the difference is positive, the participant is in a net credit position.

If the difference is negative, then the participant is in a net debit position.


The net credit or net debit position at settlement time is defined as the net settlement position.

These net positions may be calculated on a bilateral or multilateral basis.


See also

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