Exam layout
Statement of financial position (partnership) format
A partnership's statement of financial position is like a sole trader's, except that the capital section shows each partner's capital and current account balances separately.
The standard format
- Non-current and current assets
- Current and non-current liabilities
- Capital accounts (one per partner)
- Current accounts (one per partner)
- Total equals net assets
Filled example
| Capital: Partner A | RM 50,000 |
| Capital: Partner B | RM 40,000 |
| Current: Partner A | RM 6,300 |
| Current: Partner B | RM 4,200 |
| Total partners' funds | RM 100,500 |
Notes
- Each partner's capital and current balances are shown separately.
- A partner's current account may be a debit balance, reducing their total.
- Total partners' funds equal net assets, keeping the statement in balance.
Building and reading this format
A partnership statement of financial position has the same top half as any other business. The difference is in the lower half. There is more than one owner, so each owner's stake must be shown separately.
Assets and liabilities are shown together, because the resources are pooled. The capital is then broken down partner by partner.
Build the top half as usual. Show non-current assets at carrying amount. For example, a delivery van costing RM60,000 with accumulated depreciation of RM15,000 is shown at RM45,000.
List current assets in order of liquidity: inventory, trade receivables, then bank and cash. Deduct current liabilities to reveal net current assets. Then remove non-current liabilities, such as a partnership loan, to reach net assets.
The financing section has two layers for each partner. The capital accounts hold the fixed, long-term investment, for example RM50,000 from one partner and RM30,000 from another. These stay the same unless the partners agree to change them.
The current accounts move each year. Add the partner's share of residual profit, interest on capital and any salary.
Deduct drawings and interest on drawings. Total all the balances to get the partners' funds, which must agree with net assets.
The capital accounts show who has the larger long-term stake. The current accounts tell a subtler story. A partner whose current account has fallen to a small positive figure, say RM2,000, has drawn out nearly all the profit credited to them.
A negative balance is not automatically alarming. It means the partner has taken out more than they earned and owes the partnership the difference.
Marks are mostly lost by confusing the two kinds of account. Merging capital and current accounts into one figure hides what the format exists to show. Adding drawings to capital, instead of deducting them in the current account, gives a nonsensical total.
Interest on drawings reduces a partner's current account, so putting it on the wrong side is a common slip. Show each partner in a separate column and include the total that reconciles with net assets.
The current account movements come from the appropriation account that comes before this statement. Make sure your totals tie back to it.
If partnership statements and their capital and current accounts feel confusing, one of our teachers can work through a complete past-paper question with you, from appropriation to statement. Book a trial class
Related how-to
These formats are standard accounting practice with our own figures. Check your board's exact requirements on the exam boards page.
Practise the statement of financial position (partnership)
Share your own attempt in the trial class and the teacher will mark the layout line by line. One-to-one and online, from RM75/hr.
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