The statement of net assets presents the assets, liabilities and net assets of the proprietary funds. It is presented in a classified format. This does not mean that it is top secret. It means that current assets are presented separately from noncurrent assets and current liabilities are presented separately from long-term liabilities. Generally, a current asset is an asset that is cash or will be turned into cash within a one-year period. A current liability is a liability that is expected to be paid within one year. As can be implied from the classification requirement, since proprietary funds use the accrual basis of accounting and the economic resources measurement focus, the statement of net assets includes long-term assets and liabilities.
The net assets presented in the statement of net assets are categorized as invested in capital assets, net of related debt, restricted, and unrestricted, similar to the presentation discussed earlier in the chapter on the government-wide statement of net assets. Again, the invested in capital assets, net of related debt
represents the book value of capital assets purchased or constructed with debt (book value is the cost less accumulated depreciation) reduced by the amount of debt outstanding that was used to purchase or construct the assets. Where there are different types of restrictions on net assets (such as restricted for debt service or restricted for capital programs), the restricted asset amount should disclose the amounts that are restricted for each major type of restriction. Exhibit 4.7 provides an example of the proprietary funds statement of net assets.

Taken From : Governmental Accounting Made Easy

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