Statutory reporting is one of the mandatory submission of non-financial and as well as the financial information to a government agency. Each industry has their own set of rules and regulations that mandate reports. In so many countries international financial reporting standards have replaced by county-specific principles of accounting for statutory reporting. The statutory reports that should be submitted in the local language and probably they have different dates as per country for audit and submission to local regulators.
Requirements For Financial Reporting:
As per the generally accepted accounting principles every company is responsible for providing reports on their profit-making operation, cash flows, and overall financial conditions of a company. There are three major financial statements are required under GAAP:
- The balance sheet- they are prepared by using the accrual basis of accounting.
- The cash flow statement- they act as a record of cash as it enters and leaves the company
- The income statement-The income statement that includes revenue earned by a company during the reporting period.
Characteristic Of Financial Statement:
Uses: they are used in the investment analysis are the balance sheet the cash flow statement with an additional analysis of retained earnings and company’s shareholders equity and the income statement. Even though the income statement and the balance sheet receive the majority of attention from the analysts and investors it is important to include overlooked cash flow statement in your analysis.
Diversity Of Reporting:
You do not expect financial statements to be fit into a single mold. The less experienced investors must get lost when they fail to encounter a presentation of accounts that falls outside the mainstream. You should remember the diverse nature of business activities that may result in a diverse set of financial statement presentations.
Information on the state of the economy, competitive considerations, technological change, market forces, the industry, the quality of management and the workplace, they do not directly influence the company’s financial statements.
Financial Ratios And Indicators:
The perfect numbers in the financial statutory reporting are small value for the investment analysis; they must transform these numbers into a meaningful relationship to report a company’s financial performance. These should be viewed over the extended periods to sport trends.
The financial statutory reporting is a very essential one to provide the statement to the government agency and make use of this article to get familiar about the statutory reporting.