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Hi guys,
I am just wondering what is the difference between total net asset and shareholders’ fund? from my understanding they should be the same thing. but in the lecture note which I have downloaded from opentuition (P4 paper page 14), they seems different. anybody has any hint for that?
Thank you!
I think that net assets is total assets less total liabilities. This must be the sum that belongs to the shareholders (shareholders funds). But if assets consists of intangibles, then maybe the tangible shareholders fund may be different from shareholders fund shown in the books?
Yes, I agree with that “Shareholders funds” does not include intangible assets which is included in the net assets. Thanks
In the example on page 14 (which was actually copied from a very old real exam question), although the term net assets has been used (and was in the exam question) it should really say ‘total assets less current liabilities’.
It may seem unfair, but in fact if you look at the numbers it should be fairly obvious, in that there are three lines together – ‘total net assets’, ‘shareholders funds’, and ‘long term debt’ (i.e. non-current liabilities). In each of the years the shareholders funds plus the long-term debt are equal to what are written as ‘total net assets’.
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