Definition of Net Assets
Net assets is defined as total assets minus total liabilities .
Examples of Net Assets
In a sole proprietorship the amount of net assets is reported as owner's equity .
In a corporation the amount of net assets is reported as stockholders' equity .
In a not-for-profit (NFP) organization, the net amount of its total assets minus total liabilities is actually reported as net assets in its statement of financial position .
The net assets section for the NFP organization is divided into two major classifications:
- net assets without donor restrictions
- net assets with donor restrictions