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Statement of Affairs (SOA)

The Statement of Affairs is a detailed financial document that provides a snapshot of a company’s assets and liabilities at a specific point in time, often when a business is facing insolvency.

It’s a cornerstone document that offers a clear view of the company’s financial status, assisting stakeholders in making informed decisions. 

What is a Statement of Affairs?

Key Components of the Statement of Affairs

  • Assets: This section lists all the company’s assets, including fixed assets, current assets, and intangible assets, with their estimated realisable values. 
  • Liabilities: It details the company’s obligations, including secured and unsecured debts, highlighting the amounts owed to creditors. 
  • Net Worth: The SoA calculates the net worth by subtracting total liabilities from total assets, providing a critical indicator of the company’s financial health. 

The Role of the Statement of Affairs in Insolvency

In insolvency proceedings, the SoA is essential for various reasons: 

  • Creditor Information: It offers creditors a transparent view of the company’s ability to meet its obligations. 
  • Insolvency Practitioners: For professionals like those at Business Helpline, the SoA is a tool for assessing the viability of business rescue options. 
  • Legal Compliance: Ensuring accurate and timely preparation of the SoA is crucial for compliance with legal frameworks governing insolvency. 

Preparing a Statement of Affairs: Best Practices

  • Accuracy and Thoroughness: Ensure all financial information is accurate and comprehensive. 
  • Professional Valuation: Engage experts to ascertain the realisable value of assets. 
  • Timeliness: Update the SoA promptly to reflect the company’s current financial situation. 

The Impact of the Statement of Affairs on Business Decisions

Understanding the SoA enables business leaders to make informed decisions, particularly in distress situations.

It serves as a foundation for restructuring plans, liquidation decisions, or initiating insolvency procedures, ensuring that all actions are based on solid financial data. 


The Statement of Affairs is more than just a financial document; it’s a strategic tool that empowers business leaders, creditors, and insolvency professionals to navigate the complexities of financial distress with clarity and confidence.

By comprehensively understanding and effectively utilizing the SoA, stakeholders can pave the way for informed decision-making and potential business recovery. 

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    Andy Slinger

    Andy is Head of Marketing for Business Helpline with a wealth of experience Marketing in the financial sector. He has a passion for helping business owners struggling with debts.

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