What is a Change in Net Assets?

The change in net assets is the equivalent of the net profit figure on an income statement. It is used in the financial reporting of nonprofit entities. The measure reveals the change in assets derived from revenues, expenses, and any releases on the restrictions of assets during the period. A positive change indicates that a nonprofit entity is prudently managing its resources. It is one of the more closely-watched numbers in the financial statements of a nonprofit entity.

The change in net assets concept can also apply to a for-profit business, where it represents the change in assets minus liabilities over a measurement period. Stated differently, this is the change in equity over a period of time. An increase indicates that a business has either obtained more equity funding or increased its profits, while a decrease indicates the reverse situation.