What does net assets mean on the CPA exam?
Last reviewed
Net assets. Assets less liabilities. The not-for-profit and governmental term for what a business would call equity.
Defined against ASC 958-210-45.
Which CPA exam sections use net assets?
Net assets appears in the FAR section of the CPA exam.
Related terms
- capital assets: In GOVERNMENTAL reporting, long-lived assets such as land, buildings and infrastructure.
- deferred inflow of resources: An acquisition of net assets that belongs to a future period, so it sits between liabilities and equity on a government's statement of net position rather than in either.
- deferred outflow of resources: A consumption of net assets that belongs to a future period.
- goodwill: An asset representing the future economic benefits of acquired assets not separately identified, measured as consideration less identifiable net assets.
- average total assets: The average of opening and closing total assets, used wherever a period flow like sales is compared to a balance.
- bargain purchase gain: The gain recognized when identifiable net assets acquired exceed what was paid.