When purchasing or selling a property, you will almost certainly come across two important documents; a Statement of Adjustments and a Trust Ledger Statement. But, these documents seem to be difficult for those who are not working in the field of the real estate industry. Moreover, What exactly are Adjustments, Trusts, laws and more? But, how will you comprehend these words and benefit you? Further, how these terms will ensure safety against any consequences in the future. 

What is a Statement of Adjustments in Real Estate?

The Statement of Adjustments is the most essential document you will come across during real estate transactions, regardless of whether you’re buying or selling a home. It is a document that details purchasing costs, credits/deposit rules, and other information like property taxes between sellers and buyers. 

Let’s understand more deeply with the help of an example:

Suppose, a residential property is sold in Toronto. The total sale price was $500,000. Moreover, the buyer deposited $50,000. The pre-paid cost of the utilities from the seller price was $500. However, before selling the house, they lived in it only for 150 days, but the reimbursement will be half. Thus, only $250 will be credited to the seller’s account. 

Credit Buyer Credit Seller
Purchasing Cost $500,000
Deposit  $50,000
Utility Adjustment $250
Seller total owned payment $450,250

Therefore, $250 is adjusted between the buyer and seller. At last, the total payment owed by the seller is $ 450,250.

  • Buyer’s Statement of Adjustments 

Buyer’s Statement of Adjustments 

A Statement of Adjustments is similar to our monthly bank statement containing debit and credit details, with the total balance. in the Buyer’s Statement of Adjustments, the debits will show the amounts already paid like the number of deposits in the account. While the credits include the purchase price of the home and any pre-payments like property taxes or utilities that the seller has made.

  • Seller’s Statement of Adjustments

Seller’s Statement of Adjustments

The seller’s statement of adjustments is much like the buyer’s statement of Adjustments, consisting of two columns for debit/credit transactions. Where the debits column shows the charges made by the seller. On the other hand, the credits column includes the purchasing price of the house and any prepaid taxes or utilities that the buyer must pay back to the seller.

Trust Ledger Statement

A Trust Ledger is created for both the parties; buyer and seller, detailing all expenditures for both sides. After accomplishing the statement of adjustments, the buyer will transfer the total balance to the seller. Then, only the seller can move over the trust ledger statement method.

The Trust Ledger Statement not only includes the funds exchanged on closure day, but also includes additional costs such as lawyer expenses and disbursements, property tax, company title, and so on. For instance, Trust ledgers are similar to statements of adjustments, including one debit and one credit column. The column includes paying off your current mortgage, real estate agent transactions, legal costs and reimbursements, and the price spent by you, the seller, which are all debits.

Statement of Accounts & Trust Ledger Statement

These two documents draw the greatest interest for the buyer or seller. These are extremely essential as they assist you in understanding the total fees and costs linked with buying or selling a residence. The trust ledger illustrates the transfer of funds between you and your lawyer. Whereas the statement of adjustments specifies the payment summary between the buyer and seller.

These two terms manage the process of transferring funds and provide smooth closing after analysing the importance of the terms and conditions. Moreover, if you are a buyer, these terms  allow you to break down the expenses into different columns and decisively determine how much you will owe at the end of the day. On the other hand, if you are a seller, you should expect how much you will receive at the end of the day. 


Whether you are buying or selling the property, understanding the legal terms like a statement of adjustments, Trust ledger and more are essential in real estate. And while this might appear to be difficult, all you need to do is be well-informed, vigilant, and systematic. Moreover, When purchasing real estate investments, seek advice from experienced and reputable contractors and estate agents. Follow the tips we have shared in this article to understand better buyers’ and sellers’ statements of adjustments in real estate.

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Frequently Asked Question (FAQs)

What are the five types of adjustments?

Accrued revenues, Accrued expenses, Deferred revenues, Prepaid expenses and Depreciation expenses are the five types of adjustments.

What is a statement of adjustments in Ontario real estate?

A statement of adjustment is similar to an individual bank statement in that it lists the user's all transactions.

What are adjustments in the property settlement?

Adjustments in the property settlement statement refers to the 'splitting' of the costs on a property, such as land tax, water charges, etc.

What is the purpose of the statement of adjustment?

The Statement of Adjustments computes who pays what for rates and charges at the time of settlement.

What are closing adjustments?

When an agreement is closed, all expenses associated with the property are considered the buyer's obligation beginning with the closing day.

What does adjustment mean in financial statements?

A diary entry is a financial reporting adjustment that affects the income statement.