Negative assets and negative liabilities

While preparing your Performance Report, you may find that when adding together the items in the categories on your Statement of Financial Performance, the resulting value is negative. Usually what this means is that the asset or liability should actually be reported in the other grouping. For example if at the end of the year you calculate a negative value for GST payable, this would actually be a GST receivable which would instead be reported in current assets.

Before you do this though it’s important to check that you have calculated the value correctly or if it’s possible to have a negative value for that item. If you have calculated a negative value for Debtors and Prepayments you should check to make sure that you haven’t included any items that belong in Creditors and Accrued Expenses by mistake. Similarly if you have calculated a negative value for Inventory, it’s likely that there has been an error made as inventory cannot have a negative value.