Quite often, explanatory notes to financial statements provide more information about the true financial condition of an enterprise than the reports themselves. The financial statements of the enterprise provide information about the current financial position of the enterprise, as well as the effectiveness of the enterprise over the past period. On the basis of financial statements, models are created that are used in financial planning. The financial statements of the enterprise allows you to outline the main planned indicators. Can financial statements be trusted? The information contained in the financial statements makes it possible to assess the profitability of the enterprise. If the level of profitability of the enterprise is lower than required, then a more complete analysis of the situation will reveal the causes of deviations. Therefore, the information should enable the recipient to respond to this information in a timely manner.
How to write a financial statement
It does not contain information about facts that cannot be estimated accurately enough (for example, the hiring of a new employee). Also, the profit and loss account does not reflect transactions that are not related to the sale (for example, the issue of new shares).
It is much easier to manipulate income statement data than movement statement data. Money. On the other hand, the profit and loss account allows, for example, to unambiguously distinguish between the payment for the electricity consumed last month and the payment for the building that the company will rent for the next 15 years.
Profit calculation Sales volume is the income from the sale of products.
Preparation of financial statements
But the cash flow statement reflects cash flows, that is, the actual physical movements of cash from one hand to another in the form of receipts and payments that take place in the process economic activity enterprises. Income is the money received by the business.
Payments are money given by the enterprise. Every time a business writes a check, a cash payment is generated.
If the check is issued to the enterprise, then there is a cash flow. Therefore, there is little opportunity to distort the real state of affairs in the enterprise.
Attention
An increase in the company's liabilities is a source of cash. A decrease in the company's liabilities indicates the use of funds.
Reducing the assets of the enterprise is a source of cash.
How to make a financial report: where to start?
It is also worth noting that small businesses whose responsibility does not include conducting audit statements, do not represent the preparation of financial statements in the form of N 3 (statement of changes in equity), in the form of N 4 (statement of cash flows), in the form of N 5 (appendix to the balance sheet) and an explanatory note. Of all the above forms, the main one is the profit and loss statement, as well as the balance sheet.
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The easier it is to release investments, the higher the liquidity of the asset. On the other hand, each liability has its own degree of urgency - something needs to be returned quickly, something can be with the company all the time. The balance helps to see what state the money is in now, and to correlate liquidity and urgency. Balance current assets Obligations Money at the box office 10 000 ₽ payables payable 90 000 ₽ Coffee in granny 30 000 ₽ Paper glasses 10 000 ₽ Capital and reserves of coffee machine 40 000 ₽ Own capital ₽ Coffee grinder 20 000 ₽ Ricent profit 10 000 ₽ Assets 110 000 ₽ ₽ Liabilities 110 000 ₽
- 1. Reporting helps not to make mistakes, acts as a basis for management decisions and gives the entrepreneur the opportunity to see the whole business.
Financial statements are
Incorrect information is often worse than no information, as it can trigger actions that only make the situation worse. How reliable are financial statements? It is assumed that accounting in the enterprise is carried out by honest, competent people who do not make mistakes in their work.
In real life, this is not the case. Accountants, like everyone else, make mistakes. The use of technical means in calculations helps to avoid arithmetic errors. But methodological errors (duplication or omission of entries, registration of the fact of the economic life of the enterprise on the wrong accounts, etc.) are quite possible. Financial statements may be distorted due to the low technical skills of the persons compiling the report. If the accountant's earnings depend on the financial performance of the enterprise, then there may be a wrong desire to embellish the reporting.
Three main financial statements of an entrepreneur
Each report presents various information, which is somehow used by an economic entity. All material information must be disclosed in such a way that the financial statements are clear and understandable to users.
If necessary, in an explanatory note, the classification of articles and sums of money given in financial statements, should be supplemented with other information explaining their content. The financial statements must include the name legal entity, location, reporting date And reporting period.
Also must be given: short description type of activity of the organization, its legal form and the unit of measurement in which the financial statements are presented. The financial statements must show relevant data for the previous period.
Financial statements are prepared in the currency of the Republic of Kazakhstan; the unit of measurement is thousands of tenge.
How to prepare financial statements
The report helps to analyze the obligations of the company - if she is owed more than she is, then everything is going well. Otherwise, it's time for a change. It is useful to consider DDS and OPU in conjunction.
The first report shows the actual movement of funds, and the second - the obligations that the business has taken on. If you do not go into details, then DDS tells what is happening to the money now, and OPU - what will happen to them next.
To make informed decisions, it is important to see both. GTC Revenue 800,000 ₽ Cost 600,000 ₽ Profit before tax 200,000 ₽ Tax 40,000 ₽ Net profit 160 000 ₽ Third report. Balance To make managerial decisions, a business owner needs information. It is useful for him to see the whole business - to evaluate and understand all the details. For this, the Balance Statement or Balance sheet is intended.
How to prepare financial statements for a company
Profit and loss account The profit and loss account shows the income and expenses of the enterprise from operations between two adjacent balance sheet dates. From it you can see the results of the enterprise for this period: whether it received a profit or suffered losses.
When compiling a profit and loss account, income and expenses are recognized not when they are paid in cash, but when they are accrued. For example, the sale of goods is considered a fait accompli when the seller has fulfilled the terms of the contract of sale, and not when money has been received for the goods. Income is recognized as received if it can be objectively assessed and it is reasonable to assume the receipt of funds in the future. The profit and loss account is built on an accrual basis, which more accurately compares the income received and the expenses incurred for the period under review.
How to prepare consolidated financial statements
Financial statements contain the information necessary to develop investment policy enterprises, lending policies, future cash flows, assessment of the resources and obligations of the enterprise and the activities of its governing bodies. Despite the difference in the interests of different users of the financial statements of an enterprise, the main condition for the existence of an enterprise is capital adequacy for its activities.
Therefore, the main requirement (with other equal conditions) is that the owners of capital and other investors are satisfied with the information they receive from the enterprise. This position is considered common feature in the information requests of all users. Financial statements are interrelated, as they reflect different facts of the same business transactions.
Each operation is entered into it - income or expense; note who was paid and where they received the money from; divide the movement of funds into categories. Even a small business can have hundreds of transactions.
The coffee shop buys grain, water, milk and paper cups; pays the roaster, barista and cleaner; calculated on rent, taxes and loans. And each of these operations can radically change the position of the business.
DDS will alert the entrepreneur if something goes wrong. DDS Money at the beginning 100,000 ₽ July 1 Prepayment 90,000 ₽ July 2 Advance payment to employees -60,000 ₽ July 3 Rent -20,000 ₽ July 4 Purchase of raw materials -100,000 ₽ July 5 Loan to the owner 5,000 ₽ Money at the end 5,000 ₽ Report second. The income statement or profit and loss statement When an entrepreneur deals with the receipts and payments of money, the question arises about the profitability of the entire business.
They arise when using loans or loans. Depending on the maturity, short-term and long-term liabilities are distinguished. Short-term liabilities are accounts payable payable within one year (debt to trade creditors, bank overdraft). Long-term liabilities are accounts payable that are due in more than one year. TO long-term obligations relate bank loans(but not a bank overdraft, which is repaid on demand) and unpaid lease amounts. Equity capital Equity capital is the value of all property of the enterprise after payment of all debts.
At the beginning, we see a revenue of only 370 million rubles, and at the end, a profit of almost 30 billion rubles. This profit did not come from a vacuum. Interest receivable was added - 13 billion rubles. They have nothing to do with the main activity, but they affect profit. Therefore, it often happens that profit is greater than revenue, although it looks strange. Knowing the specifics of Magnit's business, we are well aware that its revenue should be much higher than profit.
The thing is that Magnit is not just one public company, but a group of companies. And each company in this holding can have its own type of activity. In the RAS report, we will see the revenue directly from the activities of the company that we are considering. In our case, this is "Rent and management real estate". This is also evidenced by the indicator in the column "Income from participation in other organizations" - 24 billion rubles. Who brought this profit? Just other holding companies.
Now let's see how this problem is solved in IFRS reporting.
We download the IFRS report from the site of the same Magnit and open the first page:
We turn to page 9 and see this:
This full list companies belonging to the Magnit group. Among them there is, for example, Tander, whose main activity is retail. All of them brought the hidden profit and revenue that we see in the RAS report.
The IFRS report provides us with already consolidated data. Here, for example, the revenue of the Magnit group of companies is already more than 1 trillion rubles.
This is very good example to understand the difference between RAS and IFRS.
Advice from an Expert - Financial Advisor
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Financial statements are a certain set of accounting indicators, which are reflected in the form of tables characterizing the movement of property, liabilities, as well as financial position firms during the reporting period. This report also includes a data schema about financial situation organization, the results of its activities, as well as its changes in the financial position. A report is compiled on the basis of data taken from accounting. Just follow these simple step by step advice and you will be on the right track in solving your financial issues.
Quick step by step guide
So let's take a look at the steps you need to take.Step - 1
Drafting financial reporting includes two main stages: preparation of materials and its subsequent compilation and presentation. In preparation for the preparation of financial report must complete all existing accounting operations that fall at the end of the reporting period, as well as check all financial data required for reporting. Next, move on to the next step of the recommendation.
Step - 2
At the same time, when preparing the financial statements, calculate the taxes payable, take an inventory of the company's property, and correct any accounting errors found in the period. Next, move on to the next step of the recommendation.
Step - 3
Prepare financial statements in accordance with the described requirements, as well as in accordance with various methodological departmental guidelines. Financial statements must be submitted on time to all interested bodies, the list of which is also determined by law, while this document must be signed and authenticated in accordance with all the paperwork requirements that apply to financial reporting. Next, move on to the next step of the recommendation.
Step - 4
Financial statements should include a variety of documents. First of all, balance sheet. Indeed, this document reflects financial situation enterprises in the reporting period. Next, move on to the next step of the recommendation.
Step - 5
You can add an annual financial statements explanatory note. In it, explain the points of filling out all forms of financial statements, give other required explanations, with the help of which this reporting is made more objective and clearer. Next, move on to the next step of the recommendation.
Financial Statements In accordance with IFRS 1, Presentation of Financial Statements, a complete set of financial statements includes the following:
Step - 6
In turn, in the explanatory note, you can use diagrams, graphs or tables. In the text explanatory note explain the principles for evaluating all production stocks enterprises, give an analysis of their use, explore ways to make the most of the company's potential, as well as improve the skills of employees. Next, move on to the next step of the recommendation.
Step - 7
Attach report statement of profit and loss to the financial statements. It describes in detail all the financial results of the company for the reporting period. Next, move on to the next step of the recommendation.
Step - 8
Also include in the reporting the following reports: on the movement of capital of the enterprise - this document will be able to show how the composition of the company's funds is changing; a statement of the movement of all funds, which will allow you to get an idea of \u200b\u200bthe expenditure of these funds of the company, their receipts and balances. Next, move on to the next step of the recommendation.
Step - 9
Report in the financial statements information about borrowed funds enterprise, its debts and loans.
We hope the answer to the question - How to make a financial report - contained useful information for you. Good luck to you! To find the answer to your question, use the form -
According to the law "On Accounting N 113-XVI" Russian Federation, adopted in 2007, to organize the preparation of financial statements at the enterprise, which is an integral part of accounting, its head is obliged. These requirements apply to all organizations and enterprises registered in the Russian territory.
The Benefits of Financial Reporting
The state, not without reason, attaches great importance to this issue. After all, regular and continuous preparation of financial statements ensures timely and error-free miscalculation of taxes and their payment to the budget. Which in turn contributes to the successful functioning of non-production structures. This means that the state itself is developing and gaining strength.
In addition, the systematic correct preparation of financial statements contributes to the planned and successful development entrepreneurial activity firms, which, together with other enterprises, has a positive impact on the development of the entire economy of the country as a whole.
Having the opportunity to see monthly calculated, including the processing and systematization of numerical data of all economic and financial transactions carried out during this period in monetary terms, the director of the company is able to correctly assess financial condition company, as well as plan further actions to promote your business project.
What is financial reporting?
Financial statements are a systematized set of monetary results that characterizes the financial position of an enterprise for a certain period. It is compiled using plans-accounts in accounting tables, order journals or other registers and contains financial indicators on the movement of goods or products, property, valuable papers, as well as various, including tax, obligations.
The usefulness of financial statements is determined by a set of special indicators. The main elements of financial statements are groups or sections of accounting, such as assets, equity, liabilities, expenses, income, losses and profits.
Enterprises;
Report on purposeful use of funds;
Movement report financial resources;
Appendix to the balance;
Characterizing profit and loss.
It is also worth noting that small businesses, whose responsibility is not to conduct an audit of financial statements, do not submit financial statements in the form N 3 (statement of changes in equity), in the form N 4 (statement of cash flows), in the form N 5 (appendix to the balance sheet) and Of all the above forms, the main one is the statement of losses and profits, as well as the balance sheet.
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How to write convenient and understandable financial reports?
I am a staunch supporter of the fact that any management information should be read easily and freely. If the report cannot be read "at a glance" - the place of such a report is not on the table, but in the wastebasket.
If there is too much information, in order to form a complete picture of what is happening in the head, one has to look through many reports (each of which takes far from one page!), And then “put the puzzle together” in the head.
It's much better to do it the other way: use the information that we already have and immediately put it into a convenient picture.
If you strictly follow the rules for compiling reports, the information will always be readable and easy to understand. Here are the rules:
Principle One
The logic of the report should be immediately visible - therefore, any report (no matter how important it may be!) Should fit on one sheet;Principle Two
Principle Three
One report that contains a lot of numbers is much worse than many reports that each contain few numbers;
If you want to decipher or detail any indicator - decipher no more than two parameters at the same time.
Now let's put these principles into practice.
To be honest, at first I wanted to come up with an example that would show how to make a report correctly. But instead decided to take the real one financial report(all figures in the report have been changed), which was brought by one of the participants in my seminars and which we brought into a “digestible” form right at the seminar.
In this report, the articles remained unchanged, but a more convenient layout was applied, which made the calculation logic clearer. The report was reduced - the indicators that had to be deciphered were included in an additional report. What happened - you be the judge ...
Was:
It became:
And two transcripts:
Well, I think that with the first principle (make clear logic and place everything on one sheet), everything is clear. Again, the second principle also partly acts here - it is better to have more reports, each of which will have fewer numbers.
Now let's take on the second (more reports - fewer numbers) and third (decipher a maximum of two parameters) principles.
The main trouble with most reports is that they try to put everything and a rhinestone into one report. This is not worth doing. Not so long ago I saw a sales report from one of the clients. I can't vouch for the accuracy of the content, but it looked something like this:
And such a table - ten sheets!
What they want to see from such a report is completely incomprehensible ... The maximum that can be squeezed out is to work with an autofilter.
It will look something like this:
Or like this:
And now let's try to make readable reports out of this garbage. I'll warn you right away - there will be a lot of them.
First three:
The next step is to combine the parameters by which the report can be deciphered in twos. You get three options:
Product x Manager
Buyer x Manager
Product x Buyer
The following three reports:
Instead of one report, there were as many as six. But six understandable reports are much more convenient than one incomprehensible one. And note - I managed to do all this in ten minutes using Excell!
I talk more about how to create simple and understandable financial reports at my training. « » .