In Personal Financial Statement, Only the estimated amount of income taxes on the differences between the estimated current values and current amounts of assets and liabilities is presented between liabilities and net worth.

I don't really understand the meaning of this statement. Please help.

Personal financial statement presents assets & liabilities at estimated current values (rather than at historcal cost).

Additionally, a provision for estimated income taxes is presented between liabilities and net worth. The estimated provision is computed as if the estimated current values of assets had been realized (sold) and the estimated current amounts of liabilities had been liquidated (paid) on the statement date.

In a way, we are reporting deferred tax liablity for estimated taxes due as if all assets were sold at estimated current fair value and all liabilites were paid at estimated current amounts. (since the assets & liabilities are shown at current values rather than hstorical costs, we need to account for the taxes also for the differences)

Presentation can be as follows:-

Mr. A
Illustrative Statement of Financial Condition
December 31, 2008

Assets
Cash              $  1,000
Commissions Receivable              4,500
Investment in certificate of deposit, 8%,
matures in 2010                                    25,000
Investment in marketable securities       70,000
Vested interest in AB Corporation retirement fund     55,500
Residence             80,000
Personal effects          ;    14,000
Total assets                                            $250,000
Liabilities
Income taxes payable, current year    5,000
Mortgage payable          ;        70,000
Total liabilities                                                    $ 75,000
Estimated income taxes on the difference between
the estimated current values of assets and the
estimated current amounts of liabilities and
their tax bases                                $ 25,000

Net worth                                                  $150,000
The notes to financial statements are an integral part of these
statements

Hope this explanation helps!!