Basic Financial Statements actually deal with monetary facts of a company. The statements actually show the monetary status of the company, the source of the money, where did it come from, where did it go and what is the present status of the money. To be precise it provides a detailed report about the monetary resource of the company.
Basic financial statements are declarations of financial information of a company. These statements are believed to be accurate and precise in terms of description. These reports contain vivid descriptions about those aspects of a company which help in decision making. These make decision making for the investors and creditors easy. Based on the statements the fiscal decisions are taken by the company. These financial statements are prepared by accountants. There are certain principles which are applied by the accountants to prepare the statements. Professional judgment is absolutely important in these cases. The statements prepared by the accountants give a scope to compare the reports of various companies and also the statements of different period for the same company.
Basic financial statements are a portion of the Comprehensive Annual Financial Report and are designed in such a way that whoever is interested to find information about the financial status of the company can comprehend the report. Basic Financial Statements include lots of information. They are:
Fund Financial Statements
Government-wide Financial Statements
The government-wide financial statements include Statements of Net Assets and Statements of Activities pertaining to the government. These reports contain all the information on the estimated assets and liabilities, revenues and expenses of the government.
The Fund Financial Statements encompasses the balance sheet, statement of net assets, net expenditures, revenues and changes in fund balance, the balance has to tally with the records provided in the Government-wide statements of net assets. Any kind of alteration in the fund balance must be updated in the report.
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