On: Financial Statements: A Beginner's Guide

[injb]

So if

Assets - Liabilities = Shareholders Equity

Then

Liabilities & Equity = Assets

So why are there separate totals (showing the same amount) for "Assets" and "Liabilities & Equity", if they are by definition the same thing?

[refrigerator → injb]

(author here) I think it’s just as a sanity check to make sure they’re equal :)

[jsmith99 → refrigerator]

Yes, that's why it's called a Balance Sheet because it shows that net assets = equity, meaning it 'balances'.

[toyg → injb]

Accountants often work by reaching the same number in two different ways, effectively performing a parity check. It spurs from double-entry, the foundation on which accounting is built.

[nsavage → injb]

The purpose of financial statements is to provide value to the users. It should be assumed that assets equal liabilities and equity. There's value in providing a separate liability total, since it gives a snapshot of the financial position of the company, more so than having to derive that from the total liabilities and equity.