How to Calculate Net Assets in a Statement of Activities and Changes in Net Assets

By Motley Fool Staff – Updated Apr 29, 2025 at 10:52 PM

Key Points

Charities blend nonprofit missions with for-profit strategies for clarity in financial reporting.
Understanding the statement of activities helps track net assets in charities.
Calculate a charity's net assets by adjusting the starting balance with period's gains or losses.

Charities and other nonprofit organizations are known best for the charitable causes they serve, but increasingly, they are using strategies and techniques borrowed from the for-profit business world. It has become extremely important for charities to account for their assets and income in a way that their stakeholders can understand, and what's known as the statement of activities and changes in net assets provides vital financial information. Below, you'll learn more about this statement and how you can use it to calculate the net assets that a nonprofit holds.

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The word Charity with a hand and red ribbon under a magnifying glass. — Image source: Getty Images.

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Charities don't work exactly like for-profit businesses, but there are a lot of similarities. Using the statement of activities and changes in net assets can help you better understand a charity's true financial condition.

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