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British English United Kingdom Company Law Accountants

Financial statements are formal records that provide essential financial information about a business or individual. They typically include four core statements: a balance sheet detailing assets and liabilities at a point in time, an income statement reporting on revenues and expenses over a period of time, a statement of retained earnings tracking changes to equity, and a statement of cash flows detailing cash inflows and outflows. Notes to the statements provide additional context and details.

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49 views1 page

British English United Kingdom Company Law Accountants

Financial statements are formal records that provide essential financial information about a business or individual. They typically include four core statements: a balance sheet detailing assets and liabilities at a point in time, an income statement reporting on revenues and expenses over a period of time, a statement of retained earnings tracking changes to equity, and a statement of cash flows detailing cash inflows and outflows. Notes to the statements provide additional context and details.

Uploaded by

Vikrant Munde
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A financial statement (or financial report) is a formal record of the financial

activities of a business, person, or other entity. In British English—including


United Kingdom company law—a financial statement is often referred to as an
account, although the term financial statement is also used, particularly by
accountants.

For a business enterprise, all the relevant financial information, presented in a


structured manner and in a form easy to understand, are called the financial
statements. They typically include four basic financial statements, accompanied
by a management discussion and analysis:[1]

1. Balance sheet: also referred to as statement of financial position or


condition, reports on a company's assets, liabilities, and Ownership equity
at a given point in time.
2. Income statement: also referred to as Profit and Loss statement (or a
"P&L"), reports on a company's income, expenses, and profits over a
period of time. Profit & Loss account provide information on the operation
of the enterprise. These include sale and the various expenses incurred
during the processing state.
3. Statement of retained earnings: explains the changes in a company's
retained earnings over the reporting period.
4. Statement of cash flows: reports on a company's cash flow activities,
particularly its operating, investing and financing activities.

For large corporations, these statements are often complex and may include an
extensive set of notes to the financial statements and management discussion and
analysis. The notes typically describe each item on the balance sheet, income
statement and cash flow statement in further detail. Notes to financial statements
are considered an integral part of the financial statements.

FINANCIAL STATEMENT DEFINITION

A written report which quantitatively describes the financial health of a


company. This includes an income statement and a balance sheet, and
often also includes a cash flow statement. Financial statements are
usually compiled on a quarterly and annual basis.

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