According to accounting standards, a complete set of financial statements consists of the following components:
1. Statement of Financial Position (Balance Sheet)
- Shows the assets, liabilities, and equity of the business at a specific date.
- Helps users assess financial stability and solvency.
2. Statement of Profit or Loss and Other Comprehensive Income
- Reports revenues, expenses, profit or loss, and other comprehensive income for a period.
- Indicates the company’s financial performance.
3. Statement of Changes in Equity
- Explains changes in owners’ equity, such as profits, dividends, and capital contributions.
- Shows how equity increases or decreases during the period.
4. Statement of Cash Flows
- Provides information on cash inflows and outflows from:
- Operating activities
- Investing activities
- Financing activities
- Helps assess liquidity and cash management.
5. Notes to the Financial Statements
- Provide additional explanations, accounting policies, and detailed breakdowns of figures.
- Enhance users’ understanding of the numbers presented.
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