ABSTRACT
There are two fundamental reasons for a manager to obtain and understand financial information. One is to use the information to make managerial and operational decisions. The manager can better plan, manage, and evaluate a service if he or she knows how much it costs, and that information can be obtained from the financial reporting system. Another reason is to demonstrate accountability by keeping stakeholders informed about the financial condition and operation of the organization. This chapter focuses on the statement of net assets. In finance, net worth is often called net assets. The financial statement prepared to disclose these financial figures is generally called the balance sheet. In US state and local governments, the balance sheet information for a government as a whole is reported in the statement of net assets or the statement of net position. The financial statement used to report annual revenues and expenses for a government as a whole is the statement of activities.
