 Historical financial statement Financial statements (or financial reports) are a record of a business' financial flows and levels. Image File history File links Download high resolution version (1580x917, 184 KB) Keywords: Wachovia National Bank Winston, North Carolina 1906 File links The following pages link to this file: Financial statements ...
Image File history File links Download high resolution version (1580x917, 184 KB) Keywords: Wachovia National Bank Winston, North Carolina 1906 File links The following pages link to this file: Financial statements ...
This article or section does not cite its references or sources. ...
Finance addresses the ways in which individuals, business entities and other organizations allocate and use monetary resources over time. ...
Typically they will include:
Today most governments require publicly-traded companies to issue, and issue in a certain way, annual financial statements. Some governments, such as the United Kingdom government, require all companies to publish annual financial statements, although smaller companies only need publish them in abbreviated form. In formal bookkeeping and accounting, a balance sheet is a statement of the book value of a business or other organization or person at a particular date, usually at the end of its fiscal year, as distinct from an income statement, also known as a statement of profit and loss...
Income statements for companies indicate how Net Revenue (money received from the sale of products and services before expenses are taken out, also known as the top line) is transformed into Net Income (the result after all revenues and expenses have been accounted for, also known as the bottom line...
A profit and loss account is a financial statement that summarizes the financial transactions for a business over a period in time. ...
A cash flow statement is a financial report that shows incoming and outgoing money during a particular period (often monthly or quarterly). ...
Statement of retained earnings, also known as Statement of owners equity, is one of financial statements, it explains the changes in companys retained earnings over the reporting period. ...
A company in the broadest sense is an aggregation of people who stay together for a common purpose. ...
History
Financial statements and records have been produced for as far back as there has been human writing. The people in the old Mesopotamian societies operated both insurance and credit (see interest) corporations, and had the obvious need of record keeping. Writing may refer to two activities: the inscribing of characters on a medium, with the intention of forming words and other constructs that represent language or record information, and the creation of material to be conveyed through written language. ...
This is an article about the ancient middle eastern region. ...
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of potential financial loss. ...
Credit as a financial term, used in such terms as credit card, refers to the granting of a loan and the creation of debt. ...
In finance, interest has three general definitions. ...
A corporation (usually known in the United Kingdom and Ireland as a company) is a legal entity (distinct from a natural person) that often has similar rights in law to those of a Civil law systems may refer to corporations as moral persons; they may also go by the name...
Financial condition Each statement presents financial data relating to a company's or a group's current financial health, business results for the previous period, and other indicators that are used by the company's stakeholders to assess the health of a company. Typically a company's stakeholders will include existing and prospective shareholders, employees and trades unions, the taxation authorities, banks, suppliers and customers.
Usually the most broad requirement is that financial statements should be true and fair. This has not always been the case in the past: for instance, in the UK the requirement used to be true and correct.
Promotion To entice new investors, most public companies assemble their financial statements on fine paper with pleasing graphics and photos, attempting to capture the excitement and culture of the organisation in a "marketing brochure" of sorts.
Audit Although the rules differ between jurisdictions, usually larger companies, and all publicly-quoted companies must have their financial statements independently audited. Note that the auditors do not certify financial statements, that is done by the company's directors. All an auditor does is examine the financial statements and records of a company and opines on whether they do indeed show a "true and fair" view (or meet other particular requirements that the auditor is engaged to opine on).
There has been much legal debate over who an auditor is liable to. Since audit reports tend to be addressed to the current shareholders, there is little doubt that they owe a legal duty of care to them. In the UK, they have been held liable to potential investors when the auditor was aware of the potential investor and how they would use the information in the financial statements. Nowadays auditors tend to include in their report liability restricting language, discouraging anyone other than the addressees of their report from relying on it. Liability is an important issue: in the UK, for example, auditors have unlimited liability.
System Financial statements can also be representations of business structures as recorded in a double-entry book-keeping system, and are used to support internal record-keeping and decision-making. While businesses are not obligated to use this format internally, most do keep its basic structure because it is well-understood by employees and well-supported by information systems. In this format, businesses view their financial condition in terms of assets, liabilities, and equity. Transactions consist of debits and credits. Double-entry book-keeping is the standard practice for recording financial transactions. ...
In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e. ...
In the most general sense, a liability is anything that is a hinderance, or puts one at a disadvantage. ...
Ownership equity, commonly known simply as equity, also risk or liable capital, is a financial term for the difference between a companys assets and liabilities -- that is, the value that accrues to the owners (sole proprietor, partners, or shareholders). ...
link title Debit is an accounting and bookkeeping term that comes from the Latin word debere which means to owe. ...
Credit as a financial term, used in such terms as credit card, refers to the granting of a loan and the creation of debt. ...
Standards and regulation To ensure that financial statements prepared by different companies can be adequately compared, they must be prepared according to certain rules. Countries under the common law legal system usually follow guidelines set in generally accepted accounting principles ("GAAP"). National accounting bodies in each country have developed their own specific sets of accounting principles. The most common internationally GAAP are U.S. generally accepted accounting principles and UK generally accepted accounting principles. This article concerns the common-law legal system, as contrasted with the civil law legal system; for other meanings of the term, within the field of law, see common law (disambiguation). ...
GAAP is an acronym for Generally Accepted Accounting Principles. ...
Generally accepted accounting principles (GAAP) are the accounting rules used to prepare financial statements for publicly traded companies and many private companies in the United States. ...
The Generally Accepted Accounting Principles in the UK, or UK GAAP, are the overall body of regulation establishing how company accounts must be prepared in the United Kingdom. ...
Different countries have developed their own accounting principles over time, making international comparisons of companies difficult. Recently there has been a push towards standardising accounting rules made by the International Accounting Standards Board ("IASB"). IASB develops International Financial Reporting Standards that have been adopted by Australia and the European Union (for publicly-quoted companies only), are under consideration in South Africa and other countries. The United States Federal Accounting Standards Board has made a commitment to converge the US GAAP and IFRS over time [1]. The International Accounting Standards Board (IASB) was founded on April 1, 2001 as the successor of IASC based in London, UK. IASB is responsible for setting International Accounting Standards. ...
International Financial Reporting Standards (IFRS), often known by the older name of International Accounting Standards (IAS) are a set of accounting standards. ...
International Financial Reporting Standards (IFRS), often known by the older name of International Accounting Standards (IAS) are a set of accounting standards. ...
The Financial Accounting Standards Board is a major organization to develop Generally Accepted Accounting Principles in the United States (US GAAP) along with SEC, AICPA, and GASB. It was created in 1973 and replaced its predecessor, the Accounting Principles Board and the Committee on Accounting Procedure of the American Institute...
See also Accountancy (British English) or accounting (American English) is the process of maintaining, auditing, and processing financial information for business purposes. ...
Basic definition Audit is the examination of records and reports of a company, in order to check that what is provided is relevant and accurate. ...
Corporate finance is a specific area of finance dealing with the financial decisions corporations make and the tools as well as analyses used to make these decisions. ...
GAAP is an acronym for Generally Accepted Accounting Principles. ...
International Financial Reporting Standards (IFRS), often known by the older name of International Accounting Standards (IAS) are a set of accounting standards. ...
Guides
External links - Annual Reports and Financial Statements
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