There appears to be two ways of showing the balance sheet: Method 1. Assets current assets investments Total Assets Liabilities current liabilities technical reserves free reserve Total Liabilities in this case total assets = total liabilities. The free reserves are a balancing item. Method 2. Assets current assets investments Total Assets Liabilities current liabilities technical reserves Total Liabilities Net Shareholders' funds in this case the Net shareholders' funds are equal to the free reserves. Both ways make sense to me. Do the examiners have a preference on which way we present the balance sheet?
I prefer method one but you could pick either. I don't think it makes a difference either as long as it is clear what you have done. Here both methods are clear and I don't think the examiners would care. If this is your biggest worry on ST3 I would love to be you
My biggest worry is generating 27 points for a nine mark question. But since there's not much I can do to improve my waffling ability I decided to make sure I understand the things that actually come in useful for work
Yeah true I guess there isn't much you can do about waffling skills... you either have them or you don't But I think most accounts in practice will use something similar to format one so that total assets = total liabilities At least in the Lloyd's/London Market from what I have seen.
