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Personal Financial Statement

Personal Financial Statement (PFS) is composed of the following:

  1. Statements of Financial Condition
  2. Statement of Changes in Net Worth

Financial institutions, insurance companies and landlords/property management companies often ask to submit PFS to consider financial conditions of applicants.

There is no standard form for PFS.    Thus, in many cases PFS is prepared by entering the information on a template given by asking parties.    PFS, however, resembles the format of financial statements you probably are familiar of.    In general, the first part, Statement of Financial Condition, take a similar concept as Balance Sheet of a company and it contains the estimated current value of personal assets, the estimated current amount of personal liabilities and the estimated tax and net worth.    The second part, Statement of Changes in Net Worth, shows the important changes in Net Worth without regard to income statement and/or statement of cash flow.

Assets are listed at their current value per the order of liquidity and liabilities are listed as their current amount per the order of maturity.    For instance, an asset, life insurance, should be shown at its cash surrender value, which is current value less any outstanding loans.    Also, PFS should use accrual basis of accou