Preparation of financial statements

According to the law "On Accounting No. 113-XVI" of the Russian Federation adopted in 2007, it is the responsibility of the head of the company to compile financial statements that form an integral part of accounting. These requirements apply to all organizations and enterprises registered in the Russian territory.

Benefit of financial statements

The state 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. That in turn contributes to the successful functioning of non-production structures. So, the state itself is developing and gaining strength.

In addition, the systematic and correct preparation of financial statements contributes to the planned and successful development of the entrepreneurial activities of the firm, 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 the calculated financial result on a monthly basis , including the processing and systematization of the numerical data of all economic and financial transactions conducted in this period in monetary terms, the director of the firm is able to correctly assess the financial condition of the company, as well as plan further actions to promote its business project.

What is financial reporting?

Financial reporting is a systematized set of monetary results that characterizes the financial position of an enterprise for a certain period. It is compiled using chart plans in accounting tables, order journals or other registers and contains financial indicators on the movement of goods or products, property, securities, 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, revenues, losses and profits.

The company's own capital, assets and liabilities are indicators of the available property and cash assets of the firm, as well as sources of financing in the reporting period. The remaining elements reflect financial and business operations that led to changes in both equity and assets and liabilities. The reflection of changes in the monetary form in all these elements is made using the appropriate reporting forms.

Forms of financial reporting

The use of report types is advisory. Therefore, forms can be developed by the organization independently. PBU 4/99 sets out general provisions and requirements for them. The following types of financial statements are used in the preparation of financial statements:

- a report on changes in fixed and working capital ;

- balance sheet of the enterprise;

- a report on the purposeful use of funds;

- a report reflecting the movement of financial resources;

- attachment to the balance sheet;

- a statement of financial results that characterizes profit and loss.

It is also worth noting that small businesses that do not have an obligation to audit the accounts do not submit financial statements in the form of No. 3 (report on changes in equity), in form No. 4 (cash flow statement), in the form of N 5 (attachment to the balance sheet) and an explanatory note. Of all the above forms, the main report is about losses and profits, as well as balance.