The statements are open to interpretation, and as a result, investors often draw vastly different conclusions about a company's financial performance. In the United Kingdom, they have been held liable to potential investors when the auditor was aware of the potential investor and how they would use the information in the financial statements. Other income could include gains from the sale of long-term assets such as land, vehicles, or a subsidiary. Those three components of the CFS are listed below. Corporate officers—the chief executive officer (CEO) and chief financial officer (CFO)—are personally responsible for fair financial reporting that provides an accurate sense of the organization to those reading the report. Relevant financial information is presented in a structured manner and in a form which is easy to understand. Financial Statements reflect the financial effects of business transactions and events on the entity. MD&A typically describes the corporation's liquidity position, capital resources,[7] results of its operations, underlying causes of material changes in financial statement items (such as asset impairment and restructuring charges), events of unusual or infrequent nature (such as mergers and acquisitions or share buybacks), positive and negative trends, effects of inflation, domestic and international market risks,[8] and significant uncertainties. The balance sheet is a financial statement provides a snapshot of the assets, the liabilities, and the shareholder’s equity. to ensure accuracy and for tax, financing, or investing purposes. Many regulators around the world such as the U.S. Securities and Exchange Commission have mandated XBRL for the submission of financial information. Additional information added to the end of financial statements that help explain specific items in the statements as well as provide a more comprehensive assessment of a company's financial condition are known as notes (or "notes to financial statements"). Financing activities generated negative cash flow or cash outflows of -$13,945 for the period. The notes clarify individual statement line-items. IASB develops International Financial Reporting Standards that have been adopted by Australia, Canada and the European Union (for publicly quoted companies only), are under consideration in South Africa and other countries. They are useful for the following reasons: To determine the ability of a business to generate cash, and the sources and uses of that cash. Investing activities include any sources and uses of cash from a company's investments into the long-term future of the company. In other words, the process of determining financial strengths and weaknesses of the entity by establishing the strategic relationship between the items of the balance sheet, profit and loss account, and other financial statements. Financial statements include: Investors and financial analysts rely on financial data to analyze the performance of a company and make predictions about its future direction of the company's stock price. The term ‘analysis’ means the sim… The operating revenue for an auto manufacturer would be realized through the production and sale of autos. Cash from financing activities include the sources of cash from investors or banks, as well as the uses of cash paid to shareholders. Cash from operations includes any changes made in cash, accounts receivable, depreciation, inventory, and accounts payable. This guide will teach you to perform financial statement analysis of the income statement, for banks isn’t that much different from a … taxation authorities). A complete set of chart of accounts is also used that is substantially different from the chart of a profit-oriented business. Components of Financial Statement Below is a portion of Exxon Mobil Corporation's (XOM) balance sheet as of September 30, 2018. Notes to financial statements are considered an integral part of the financial statements. "[2] Financial statements may be used by users for different purposes: Consolidated financial statements are defined as "Financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent (company) and its subsidiaries are presented as those of a single economic entity", according to International Accounting Standard 27 "Consolidated and separate financial statements", and International Financial Reporting Standard 10 "Consolidated financial statements".[3][4]. A comprehensive income statement involves those other comprehensive income items which are not included while determining net income. 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