Difference between revisions of "Financial Statements"
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* The [[Income Statement]] or [[Profit and Loss Statement]] '''profit and loss report''' ('''P&L report''') | * The [[Income Statement]] or [[Profit and Loss Statement]] '''profit and loss report''' ('''P&L report''') | ||
* The [[Statement of Comprehensive Income]], or '''statement of revenue & expense''' | * The [[Statement of Comprehensive Income]], or '''statement of revenue & expense''' | ||
| − | * The [[Cash | + | * The [[Statement of Cash Flows]] reports on an entity's [[Cash Flow]] |
* The [[Statement of Changes in Equity]] or '''statement of equity''', or '''statement of retained earnings''' | * The [[Statement of Changes in Equity]] or '''statement of equity''', or '''statement of retained earnings''' | ||
Revision as of 18:13, 13 April 2021
Contents
Definition
Financial Statements is a collection of disclosures, typically by incorporated legal entities
Common Financial Statements
The precise composition (number, title and content of financial statements) is part of the Financial Reporting Standards under which an entity is Reporting its financial condition. A typical set might include[1]:
- The Balance Sheet or Statement of Financial Position offers a snapshot of a company's assets and liabilities at a given point in time.
- The Income Statement or Profit and Loss Statement profit and loss report (P&L report)
- The Statement of Comprehensive Income, or statement of revenue & expense
- The Statement of Cash Flows reports on an entity's Cash Flow
- The Statement of Changes in Equity or statement of equity, or statement of retained earnings
Fundamental Requirements
Reporting on the state of an entity over time requires in principle only two types of reports:
- A Stock Variable report that lists measured characteristics of an entity at a snapshot of time
- A Flow Variable report that lists changes in measured characteristics over an interval of time
These two fundamental reports are in principle linked via identities (conservation laws) that stipulate that changes in stock variables are affected only through flow variables.
The balance sheet report is the only financial statement that focuses on stock variables. The other statements are flow reports that single out specific flows and stocks for their particular importance:
- Cash as the simplest / most fundamental financial asset in monetary systems / economies
- Equity as the principal contractual relationship providing investment Capital
See Also
References
- ↑ Smaller entities and simpler operations might have further options to reduce the number / content of reports
