How does a statement of financial position differ from a balance sheet?

The statement of financial position differs from a balance sheet primarily in the terminology used to describe equity. In a statement of financial position, the term "net assets" is utilized instead of "ownership equity" or "shareholders’ equity," which is commonly found on a balance sheet. This reflects the specific context of nonprofit and governmental entities where the concept of ownership is not applicable in the traditional sense, as these organizations do not have owners in the way for-profit companies do. Instead, they represent the residual interest in the assets after liabilities are deducted, which is termed net assets. This distinction is essential as it emphasizes the unique financial structure and accountability of nonprofit and governmental organizations compared to for-profit entities.

The other options, while relevant to accounting practices, do not address the fundamental difference in terminology and perspective between these two types of financial statements. For example, fixed assets being reported at depreciated value or the classification of liabilities are practices that can apply to both types of financial reports. Meanwhile, suggesting that the difference is merely in the title overlooks the significant implications of the terms used and what they convey about the organization's financial position and responsibilities.