What is financial reporting?
Definition of Financial Reporting
Financial reporting helps you make informed decisions about investment, managing the business and forecasting for the future. Financial reporting tracks all financial movement in your business and aids in the evaluation and analysis of your business and its income and expenses.
The Financial reports help the reader understand the usage of business resources and the overall financial health and risk.
Different types of Financial Reports
What is the real purpose of Financial Reporting?
Answer:
1) Cash Flow Analysis and Forecasting
This report indicates the sources of income and expenses. Forecasting Income and Expenses helps the business make plans and decisions and excute these at the right time.
2) Investment Appraisal
If the business is looking to get investors or make investments, then financial reports will indicate whether the business is a good investment for investors and the risk involved should the business seek credit. A business owner would also analyse these reports should further investment decisions need to be made.
3) The balance between equity, assets and liabilities
Disclosure is made of the equity held in the business and detail of the assets and liabilities.
Through constant analysis of these financial reports a business is able to better anticipate what lies ahead. Financial Reports are controlled by the standards of the International Reporting Standards (IFRS) and IFRS for SME's.
Need assistance with your Financial Reporting? Contact Zeelie Professional Accountants SA
Disclaimer: The views or opinions expressed on this site are solely those of the original authors and other contributors. The material and information contained on this website is for general information purposes only and should not be relied upon as a basis for making business, legal, tax or other decisions. Always consult with a professional first. Whilst we endeavor to keep the information up to date and correct, we do not make any express or implied representation as to the completeness or accuracy of the information published. Please note that tax legislation is updated annually, and any tax publications may be outdated. Links in this website may lead to other websites outside of our control and we accept no liability in respect thereof. Zeelie Professional Accountants SA (Pty) Ltd accepts no liability for loss or damage arising directly or indirectly from the use of any of the material on this site.
