Notes to the financial statements

Notes to the financial statements disclose the detailed assumptions made by accountants when preparing a company’s: income statement, balance sheet, statement of changes of financial position, or statement of retained earnings. The notes are essential to fully understanding these documents. What are the notes to the financial statements? Notes are an integral part of a complete … Read more

What is Financial Statement Manipulation?

Financial statement manipulation refers to the practice of using creative accounting tricks to make a company’s financial statements reflect what the company wants its performance to look like rather than its actual performance. Why do companies manipulate financial statements? The decision to manipulate financial statements lies with a company’s management. Usually, they may have several reasons … Read more

What is Calendarization? Explained with example

Calendarization refers to the accounting process of standardizing the full financial statements of two or more different companies. This process aims to facilitate the comparison of two or more companies’ financial statements. What is Calendarization? When comparing comparable companies, it is important to compare their financial data across the same earnings period. This ensures data … Read more

Why is Annual Reports Important for Investors?

Annual Reports provide a snapshot of a corporation’s financial health at a particular point in time, giving insight into its performance, operations, cash flow, and overall conditions. Shareholders need them to make informed decisions about their equity investments, especially when it comes time to vote on corporate matters. There are a variety of tools shareholders have at their disposal to … Read more

Presentation of Financial Statements – Requirements Explained

IAS 1 Presentation of Financial Statements prescribes the basis for the presentation of general purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities. It sets out overall requirements for the presentation of financial statements, guidelines for their structure, and minimum requirements … Read more