Accounting statements are a clear system of accounting indicators that demonstrate the actual state of affairs at the enterprise and reflect the results of production and financial activities. It is necessary for analysis and objective assessment of the performance of the company.
The basis for its compilation are credentials. What constitutes accounting statements, types and requirements for its preparation is the topic of this article.
Functions Performed
The functionality of financial statements extends in two directions: timely provision of reliable information and control over the situation in the company.
Informational information presupposes the availability of information on the actual state of affairs and the results of the activities carried out by the company as a whole, as well as in all areas and industries.
The controlling function is to ensure quality monitoring of the provision of truly reliable information. Such internal financial supervision is carried out for each accounting cycle, i.e., each reporting period ends with the preparation of a financial report, which is the logical end of the period and documentary confirmation of the results of the company received.
The concept and types of financial statements
So, the reporting of the enterprise is the final stage of accounting work and the generalization of information on the property and financial condition of the company. Reporting information is used by external users, evaluating the effectiveness of the company (for example, in the industry), as well as for conducting analytical work within the organization. In addition, the head of the company relies on the data of financial statements in the implementation of operational management, and for economic services - this is the starting point in the planning and subsequent development of production. Reporting is based on the principles of reliability and timeliness of recording accounting operations, as well as comparability of the final indicators of the report with similar data from previous periods.
The current legislation approved standard reporting forms. Financial statements are grouped by type, frequency of provision and level of generalization of accounting information.
What are the reports
According to the regularity of reporting, it is annual or interim. In accordance with the name, interim reports are compiled for various time periods, for example, for a month, quarter, or six months. The annual form is based on the results of the year.
The degree of generalization of data also varies. There are primary reports drawn up by subsidiaries and consolidated, which are consolidated, that is, combining data from all structural divisions of the company.
Forms and types of financial statements
Today, there are several types of reporting and many complementary applications. Based on the length of the period for which it is formed, any of its species can be considered both annual and intermediate.
The financial statements, the types of which are considered in this review, are represented by the balance sheet and reports to it:
• profit and loss;
• change in capital;
• cash flow.
The listed forms constitute a mandatory package of intra-annual quarterly reports. The annual is supplemented by the following reports:
• Appendix to the balance sheet (f-ma number 5):
• an explanatory note providing detailed information on the operations performed;
• conclusion of the auditor drawn up based on the results of verification of reporting data.
The specifics of the company contributes to the addition of the specified package with other reports. For example, public organizations annually report on the target direction of funds, drawing up the appropriate form, and departmental reports are approved and agreed with the RF Ministry of Finance for various industry companies.
The current legislation approved special standard reporting forms and recommendations for their completion. Each of these reports discloses its specific information. Let's talk about each of them.
Balance sheet
Balance, being the main form, precedes the types and composition of the financial statements of any enterprise. It is a table, in the first two sections of which all assets of the company (property and working capital) are listed in value terms, in the third, fourth and fifth - the sources of formation of these assets, i.e. funds, capital, reserves and loans. The construction of the balance sheet is based on the equality of the sum of assets to the sum of financial costs. It indicates only the remaining indicators at the beginning of the reporting period and its end.
The dynamics of growth, change or movement of a particular indicator during the entire analyzed period in the balance sheet can be seen only in the general absolute figures, fixing the growth or decrease in value. The most detailed information is provided by the reports attached to the balance sheet.
Report about incomes and material losses
Among the reports supplementing the main form, this form dominates, positioning the types of financial statements of the organization. It contains information on the income received and the costs incurred, reflecting the dynamics of the production process. The financial result calculated from the beginning of the year on an accrual basis is calculated by calculation. This form makes it possible to objectively evaluate the activities of the company for the billing period.
This report, along with the balance sheet form, is mandatory for enterprises of all forms of ownership, including small business.
Statement of Changes in Equity
Not mandatory for small organizations, this report is included in the basic set of financial forms and supplements the types of financial statements of the enterprise. It summarizes information showing changes in the authorized and other capital of the company - reserve, additional, as well as retained earnings.
The form provides for the completion of two parts. The first one contains information about the available capital in the previous reporting period, the second part is devoted to information for the considered time period. The information in this report decodes the balance sheet figures concentrated in the third section.
Cash flow statement
Types of financial statements are supplemented by a specific form that shows the dynamics of the movement of the most liquid assets of the company - cash. Data on actual inflows and outflows of financial resources are submitted in comparison with the data of the previous period, which involves an analysis of the dynamics of the asset. The information presented in the report is based on the data of the second section of the balance sheet, where the information on the company's working capital is concentrated.
Financial Reporting Requirements
The information presented in the reporting forms is the most important source for obtaining information about the state of affairs in the company. Therefore, financial statements, the types of which are described in this article, provide for a number of requirements. These include reliability, integrity, relevance. To ensure them, at the end of the financial year, the enterprise conducts an inventory of all accounting accounts - property, production assets and stocks, cash, liabilities and debts.
In addition, the delivery of financial statements must be carried out at specified times, in the sheets of reports all the necessary information and details are filled in, stamps are put down. The financial statements, the types required for an individual company, are approved by the respective signatures.