If a person says they are worth $10 billion but they own a US company that is privately held, (making it a pass-through entity) and that company owes $20 billion, how is that person allowed to say they are a billionaire? Thank you. Btw: this is an ACCOUNTING question, not a POLITICS question.
In: Economics
A persons net worth is calculated by subtracting their total liabilities (debt) from their total assets. If, for instance, you have $20,000 in savings, a house with a fair market value of $500,000 and a mortgage balance of $100,000, you would have a net worth of $420,000. $20,000+$500,000-$100,000.
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