The amount by which the total assets of an entity/ business exceed its total liabilities. In other words, net assets are total assets minus total liabilities:
Net assets = total assets – total liabilities
The amount of net assets (on asset side) is exactly equal to the shareholders’ equity (net worth) of an entity/ business (on liability and equity side). In a nonprofit, net assets are sub-categorized into unrestricted and restricted net assets.
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