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Corporate Financial Reporting

>> August 30, 2011

Introduction of Corporate Financial Reporting 

Corporate financial reporting is not only to show the financial statements of corporate but it includes to highlight important financial data and to show the application of financial policy. A good financial reporting will show true financial position of company. Company can save from hidden losses, if its accountant highlights critical points in it. In this way, it is helpful tool to investors for better decision making.

Definition of Corporate Financial Reporting 

Corporate financial reporting is the system of making corporate financial reports. These corporate financial reports are income statement, balance sheet, cash flow statement, statement of retained earning and financial policies explanation. Corporate financial reporting may be shown at the end of month or at the end of each quarter or at the end of year.

1st Corporate Financial Report : Income Statement

It is also called profit and loss account. In income statement, we come to know whether company is earning profit or suffering loss. We can find the main expenses of company and main sources of earning. What amount , it is giving in the form of dividend which is showed in statement of retained earning. Net income after all adjustments is transferred to reserve and surplus section in the liability side of balance sheet. 

2nd Corporate Financial Report : Balance Sheet 

This corporate financial report shows the financial position at given point of time. It provides the information of  all assets and liabilities. This financial report is useful for balance sheet analysis.

3rd Corporate Financial Report : Cash Flow Statement 

In cash flow statement tells us the net cash flow in operating, investing and financial activities. This indications are helpful to analyze cash flow. This report explains the sources and applications of liquidity of company.

4th Corporate Financial Report : Explanation of Financial Policies and Notes

Big corporates also makes some financial notes and explain the financial policies in detail with above financial reports. In these policies, company shows its inventory policy, depreciation policy, debt terms and dividend policy. It also shows list of loss of impairment on fixed assets.

Financial Reporting Explanation

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