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Businesses on an annual basis need to compile financial statements for their business.
Financial statements are a formal record of the financial activities of a business for a given period of time, usually a financial year. These statements can be for a sole trader, a partnership, a trust or a company. The information in these statements is in a structured manner and in a standard format able to be understood due to the standard layout of the statements.
They consist of a Profit and Loss, a Balance sheet and the owners’ equity in the business. The Profit and Loss records the income and expenses of the business showing the resulting Profit or Loss. The Balance Sheet shows the Assets and Liabilities in various classes and the Equity that the owners have in the business.
Depending on the complexity of the business the statements can be very comprehensive.
The purpose of financial statements is to provide information about the financial position, performance and changes in financial position of a business. Financial statements should be able to be understood and show the true position of the business at a point in time. They need to be useful to a range of users such as financiers and owners in order to make decisions on and for the business.
Accounting standards apply to the format of Financial Statements; therefore care needs to be taken to comply.
We at Liberty Wealth Group can provide Financial Statements for your business.
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