Financial Statements
- Tags
- finance
Summary of Financial Accounting.
See characteristics of a [see page 10, financial statement], to summarise financial information should be:
- Relevant
- Predictive value, can be used to form expectations about the future
- Confirmatory value, can confirm or correct prior expectations
- Materially complete. Information is material if omitting (or mistating) it could change the decisions made by users.
- Faithfully Representative
- Complete, all relevent information is provided
- Neutral, information cannot favor one interested party over another
- Free from error
It would also be nice if the account is:
- Comparable, can easily be compared alongside other reports
- Verifiable, other people measuring it come to same conclusion
- Timeliness, information should be available before it can influence decisions (eg. in 2 weeks we're gonna file for bankruptcy... you find out 3 weeks later :P)
- Understandable, information isn't barfed onto you.
Variants
There are 3 kinds of [see page 23, financial statements]: