FINANCIAL REPORTING IS A METHOD OF

REPORTING FINANCIAL STATUS OF A FIRM

DEFINITION OF FINANCIAL
REPORTING
 Financial reporting is the process of communicating a company's
financial performance to investors and other interested parties, such as
regulators or the public. This communication typically takes the form
of financial statements, which include the balance sheet, income
statement, and cash flow statement.
 Financial reports typically include three core statements: the balance
sheet, the income statement, and the cash flow statement.
 Financial reporting is governed by accounting standards and
regulations such as Generally Accepted Accounting Principles
(GAAP) or International Financial Reporting Standards (IFRS).
IMPORTANCE OF FINANCIAL REPORTING

 Monitors income and expenses

 Ensures compliance

 Communicates essential data

 Supports financial analysis and decision-making

TYPES OF FINANCIAL REPORTING
 Financial Statement
 Balance Sheet:Presents the assets, liabilities, and equity of the company at a
specific point in time
 Income Statement (Profit and Loss Statement): Shows the revenues, expenses,
and profits or losses over a specific period.
 Cash Flow Statement: Illustrates how changes in balance sheet accounts affect
cash and cash equivalents.
 Statement of shareholder equity
Shareholders' equity typically appears on the balance sheet, however,
larger corporations may document these activities on separate statements. The statement
of shareholder equity serves this purpose and includes the amounts key stakeholders
and owners invest in a company.
WHO USES FINANCIAL REPORTS?
 Investors, shareholders and creditors

 Executive managers

 Regulatory institutions

 Industry consumers

 Unions and employees

CONCLUSION

Financial reporting is indeed a crucial method of communicating the

financial status and performance of a firm to various stakeholders,
including investors, creditors, regulators, and internal management.

Timely and accurate financial reporting is crucial for

decision-making by investors, creditors, and other stakeholders, as it
provides insights into a company's financial health, performance, and
potential risks and opportunities.
THANK YOU