What is the primary purpose of the Statement of Net Position?

The primary purpose of the Statement of Net Position is to report the government's financial position at a specific point in time. This financial statement provides a snapshot of the government’s assets, liabilities, and net position, illustrating the overall financial standing of the government at that specific moment. It reflects the resources available to the government and what it owes, establishing a basis for assessing the financial health and stability of the government entity.

The Statement of Net Position is especially vital for users who need to understand the fiscal condition of a government, including its ability to meet future obligations and fund services. This contrasts with other financial statements that focus on cash flows, detailed revenue and expenditure accounts, or program performance, which serve different purposes in financial reporting and analysis.