I was thinking of applying to my credit union for a loan to buy a new car. The application requires me to list all assets & liabilities for a net worth statement. I receive a monthly retirement check and SS. How do they compute in a listing of assets for the net worth statement? Are they considered only as part of my gross income and not as “assets”?
(Back later this weekend.)
From an accounting perspective your retirement and SS checks would be on your income statement. IOW, they aren’t an asset.
Your bank wants to know two things. In accounting speak, they want a Balance Sheet and an Income Statement.
A Balance Sheet shows everything you have (assets) and owe (liabilities) RIGHT NOW. Bank accounts, what your house is worth, how much you owe on credit cards and your mortgage etc. Add the assets, subtract the liabilities. If you die today, this is what you’re worth.
The income statement is a list of where your money is coming from and how much it is and what it’s historically been so they know what to expect during the life of the loan. That’s your SS and retirement checks.
Your net worth has nothing to do with income streams. You could make $100,000 a year but have a $600,000 negative net worth because of debt.