Financial Reporting

Chapter 7
Annual Report of a Company

 For legal and necessity reasons, companies publish annual report

at the end of financial year. It has three parts:
 Director’s report
 Financial statements
 Audit report
Financial statements
 Balance sheet
 Income statement
 A funds flow statement
 Statement showing equity movement
 Notes to the financial statements are important and may contain the following
 Accounting methods used
 Greater details regarding certain figures
 Disclosures
 Directors salaries
 Financial statements helps to inform, control and plan for the
company
 Limitations of financial statements
 Depreciation of real estate properties
 Difference in accounting policies of companies which may give a
misleading picture in comparison