The main purpose of a financial statement is to provide accurate information about the financial position of a company. It indicates mostly the cash flow of entities which is useful to make important economic decisions. A financial statement is relevant, understandable, complete and comparable. Moreover, the financial services reveal how the management manages its resources and allocates its funds. Moreover, it is a formal record of the business activities of an entity quantifying the financial strength and performance.
The complete set of financial statement includes:
Statement of financial position
Statement of comprehensive income
Statement of changes in equity &
Statement of cash flows
Statement of financial position
A financial statement is supposed to include the name of the entity and the currency in which it will be prepared. A statement of financial position will include both the current and non-current assets and liabilities separately. Some additional information which need to be disclosed are changes in capital when there are no shares involved.
Statement of comprehensive income
A statement of comprehensive income is a single-statement which comprises of the income statement and expenses which are not a part of profit and loss. These include revaluation surpluses and actuarial losses and gains. Disclosures are required for the taxes to come to effect and other adjustments which are related to the components of comprehensive income.
Statement of changes in equity
A statement of changes in equity includes:
Total comprehensive income which is analyzed both between the owners and those who do not control the assets is included in this statement. In the statement of equity, the profit, loss and other items of the comprehensive income are included. This also includes the dividends, distributions and investments. The dividends can be presented either in the statement or in the notes which are added to the statement of equity.
Statement of cash flows:
Lastly, this financial statement is a measure of a company’s financial stability and indicates the firm’s ability to pay back to the creditors. To develop this statement you will require the balance sheet data for the last two years. The statement of cash flows reports the significant changes in the cash position of a company as indicated by the balance sheets, plus the impact of net income and deprecation on the finances.
E-bridgeonline outsourcing for the financial services provides financial statements which are prepared by a company’s management with maximum accuracy to report the financial performance over a specific time period.
Recent Comments