Wednesday, 22 March 2017

General Purpose Financial Reporting

Financial Reporting

Companies are preparing and issuing general purpose financial reports to assist in the decision-making process of stakeholders.

Decision making is an integral part of the business. When it comes to CFO's or Finance Managers's, its financial statements based on which they are making decisions.

The objective of general purpose financial statement reporting is to help the decision makers. This includes the internal and external stakeholders in making the right decision at the right time.

This report mainly contains information about the company’s resources and obligations. This information is about the resources and obligations will help users of the financial report to assess the assets, its claims. The information regards to the position will help the users to evaluate liquidity, solvency etc.

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All the financial information must be separated. Because the users want to differentiate various factors. The main usage of this information is getting an understanding of the relationships among items like return on capital, evaluate of management etc.

To have a clear understanding, Financial Statements are required additional information. It may be added as notes, as financial statements are a primary means of communication only.

All the additional information will include the statements. The notes will also constitute a vital part of the financial statement.

 Full set of financial Statement includes

This is only an introduction to General Purpose Financial Reporting. We publish more details soon. For detailed reading , You can refer Guide to Financial Reporting and Analysis 
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