Net worth

Net worth is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities.

[3] The liabilities are financial obligations such as loans, mortgages, and accounts payable (AP) that deplete resources.

To the extent items on the balance sheet do not express their true (market) value, the net worth will also be inaccurate.

On reading the balance sheet, if the accumulated losses exceed the shareholder's equity, net worth becomes negative.

Examples of assets that an individual would factor into their net worth are retirement accounts, other investments, home(s), and vehicles.

Massive governmental organizations rely on consistent and effective accounting in order to identify total net worth.