Financial reporting is the disclosure of economic results and also associated details to monitoring and outside stakeholders (e.g., investors, customers, regulatory authorities) concerning just how a firm is executing over a certain duration of time.
Financial data reports are usually released on a quarterly and annual basis and consist of the following:
Annual Report or Statement of Financial Position– records on a business’s possessions, liabilities, as well as proprietors’ equity at an offered factor in time, generally completion of a financial quarter or year.
Earnings Statement or Profit and also Loss Report– records on a company’s earnings, costs, and profits over a duration of time, such as a financial quarter or year. This consists of sales as well as the different expenses sustained during the stated duration.
Declaration of Changes in Equity or Statement of Retained Earnings– reports on the changes in equity of the company throughout the stated period, such as a fiscal quarter or year.
Capital Statement– records on a business’s capital activities, including its operating, spending, and funding activities. These are usually referred to as sources and also usages of money.
For publicly held companies, these monetary reports can be really detailed as well as facility. They generally consist of extensive afterthoughts, in addition to an administration discussion as well as analysis (MD&A). The notes give details concerning each thing on the annual report, earnings declaration, and also money flow declaration, consisting of insights into the bookkeeping method made use of.
Financial reporting for personal as well as public business should be done according to normally approved accounting standards (GAAP). As an example, US companies have to report their outcomes under US GAAP, whereas firms in a lot of global markets report under International Financial Reporting Standards (IFRS). These accounting standards offer concepts and also guidelines that should be complied with to ensure accuracy, uniformity, as well as comparability in financial results.