knowledge topics
Net Worth Statement
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define a net worth statement.
- Explain the purpose of a net worth statement.
- Explain what a net worth statement may be used for.
- Define asset.
- Define liability.
- Define net worth.
- Calculate net worth.
- Current
- Projected
- Explain how each of the factors may impact net worth over a period of time, such as:
- Asset values
- Liability values
- Cash flow surpluses/deficits
- Growth in asset values
- Reduction in asset values
- Growth in liability values
- Reduction in liability values
- Evaluate how each of the factors may impact net worth over a period of time.
- Interpret a change in net worth over a period of time.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
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