Category Financial Statements Reporting

Financial statements are the reports which tell all about the financial performance and financial position of an entity. Actually, these are the final output of all the accounting transactions entered into an accounting system. Easily, we can say it is the summary report of an accounting system of any entity.

Components of Financial Statements (FS)

There are five components of FS

  1. Balance sheet
  2. Income statement
  3. Statement of cash flows
  4. Statement of changes in equity
  5. Notes and disclosures

Time Period

Financial statements are prepared on a regular basis in order to meet the requirement of the Time period principle. According to legislation applicable in many parts of the world, it is mandatory to prepare and issue these statements at least annually. The purpose is to keep outside parties such as shareholders, investors, and lenders aware of the financial performance and financial position of the entity.

Interim Financial Statements

However, we have seen various companies are exercising practices to issue financial statements on a quarterly and half-yearly basis in addition to the annual statements. There is no requirement to include detailed notes and disclosure in the interim reports. So, usually interim reports are prepared in a condensed format to ease out the workload of the accountant and accounts department.

Related Posts: Financial Statment MCQs

Accounting Errors

In preparing the financial statements, the accountant may do some types of errors which is called accounting errors. In order to resolve this matter, IAS 8 requires the entity to correct the error by restating its financial statement via retrospective…

Changes in Accounting Principles

Financial statements are prepared over the basis of accounting principles. So, it is the entity’s responsibility to follow the same policies year by year. This ensures comparability concept of accounting is being followed in the preparation of financial statements. Usually,…

Notes and Disclosure

On the face of balance sheet, income statement, statement of cash flows and statement of changes in equity, all the information cannot be presented. In order to provide additional information about the figures, accountants take the support of notes and…

Statement of Changes in Equity

Statement of changes in equity is an important financial statement that shows movements in shareholder’s equity portion during the reporting period. It discloses two types of movements which are: The transaction with shareholders such as issuance of new shares or…