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Financial statement (view source)
Revision as of 19:33, February 23, 2018
, 19:33, February 23, 2018add statement of equity section
A '''financial statement''' (or '''financial report''') is a record of the financial activities of a business or other entity.
A '''financial statement''' (or '''financial report''') is a record of the financial activities of a business or other entity.
In the private sector (including non-profit/not-for-profit entities) there are four basic financial statements: the '''balance sheet''', the '''income statement''', the '''statement of retained earnings''', and the '''statement of cash flows''' (in some entities different terms may be used). Of the four, only the balance sheet represents activities '''''at a single point in time''''' (usually as of the end of the entity's [[fiscal year]]) whereas the other statements represent activities '''''during a period of time''''' (usually an entire fiscal year).
In the private sector (including non-profit/not-for-profit entities) there are four basic financial statements: the '''balance sheet''', the '''income statement''', the '''statement of equity''', and the '''statement of cash flows''' (in some entities different terms may be used). Of the four, only the balance sheet represents activities '''''at a single point in time''''' (usually as of the end of the entity's [[fiscal year]]) whereas the other statements represent activities '''''during a period of time''''' (usually an entire fiscal year).
The statements (including the format) may be specified by law or regulation. Larger companies will also include extensive footnotes (some of which are required by law or regulation) as well as a management discussion and analysis of their contents.
The statements (including the format) may be specified by law or regulation. Larger companies will also include extensive footnotes (some of which are required by law or regulation) as well as a management discussion and analysis of their contents.
The irregular section includes items which are not expected to recur. These items are reported '''''net of taxes'''''. The most common item in this category is '''discontinued operations'''. A discontinued operation is one where the company either has stopped doing business, or has announced plans to do so. This can mean either a line of business (e.g. a company that customizes and maintains aircraft decides to get out of maintaining aircraft) or a geographical area (e.g. a grocery chain decides to exit the Dallas-Fort Worth market, but continue operations in other parts of the country).
The irregular section includes items which are not expected to recur. These items are reported '''''net of taxes'''''. The most common item in this category is '''discontinued operations'''. A discontinued operation is one where the company either has stopped doing business, or has announced plans to do so. This can mean either a line of business (e.g. a company that customizes and maintains aircraft decides to get out of maintaining aircraft) or a geographical area (e.g. a grocery chain decides to exit the Dallas-Fort Worth market, but continue operations in other parts of the country).
==Statement of Equity==
The '''statement of equity''', also commonly called a '''statement of retained earnings''', shows the changes in an entity's equity during a period in time.
Primarily, it takes information from the income statement and provides information to the balance sheet.
The main component is the changes in retained earnings (as a result of net income or net loss) during that period. However, the statement also shows other changes, such as additional stock issued, stock repurchased and held as treasury stock, and dividends paid.
The statement may be shown as a separate schedule, or may be combined with the balance sheet (the most common) or the income statement.
[[Category:Accounting]]
[[Category:Accounting]]