What is the meaning of financial reporting?
Moreover, what is the purpose of a financial report?
The general purpose of the financial statements is to provide information about the results of operations, financial position, and cash flows of an organization. This information is used by the readers of financial statements to make decisions regarding the allocation of resources.
Subsequently, question is, how is financial reporting done? Financial reporting involves the disclosure of financial information to management and the public (if the company is publicly traded) about how the company is performing over a specific period of time. Financial reports are usually issued on a quarterly and annual basis.
Also question is, what are the different types of financial reporting?
There are four main types of financial statements, which are as follows:
- Income statement. This report reveals the financial performance of an organization for the entire reporting period.
- Balance sheet.
- Statement of cash flows.
- Statement of changes in equity.
What is the main objective of financial reporting?
According to International Accounting Standard Board (IASB), the objective of financial reporting is “to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.”