Financial statements
A set of business financial statements, presented in the form of written reports, includes five reports prepared to present the company's financial performance over a specified period, including information on assets, liabilities, revenues, expenses, net profits, and others.
These reports are: income list, financial position list, cash flow list, equity change list, and comprehensive income list.
It is the means by which businesses communicate financial information to the users of such lists and assist senior management in making decisions and shaping a clear vision of the company's financial future.
: financial statements types
- List of financial positions: This list contains a financial position that includes assets, liabilities, and equity. These three elements should be clarified in detail to determine the contents of each element and calculate the WCL.
- Income statement is one of the primary financial statements on which most companies and organizations rely for their income and expenses. As well as the determination of income or loss and overall income earned over a specified period of time
- List of cash flows A list of cash flows contains a presentation of cash flows occurring from a company's or organization's activity during a specified period of time. Cash flows resulting from operational, investment or financing activities are based on the activities of the company or organization.
- Equity List: A list that shows the equity of the shareholders and displays items of equity in detail, such as Treasury shares and retained earnings, as a means of determining the value of the project capital at the end of the term
- Universal Income List: One of the most important financial statements of external parties. This list contains, Net Income: which is taken from the income list. Other universal income: positive or negative in value, which in turn affects shareholder equity and retained earnings.
Basis for preparing the financial statements:
The most important principles and foundations for preparing financial statements are:
- the principle of historical cost
- the principle of verifiable value
- the principle of honesty and disclosure
- the principle of conformity
- What are the objectives of the financial statements؟
- Disclosing all data and information appropriate to the needs of individuals using the lists.
- Providing reliable information on the economic elements of the enterprise; This is to identify weaknesses and strengths.
- . Paying attention to all groups that benefit from the financial statements, especially current and potential investors and creditors.
- Follow up on information affecting the company's cash flows.
- Disclosing all appropriate data and information to users of the financial statements.