What are Financial Statements?


A financial Statement is an aggregation and summary of business transactions, recorded in money terms, arranged and organized in ways that give users meaningful information.


What is this about the USES of the financial statements?


The financial statement, prepared in accordance with the financial reporting and accounting standards, gives the user information about the financial position of the Company as at a specific date, the operating results, the sources and applications of the Company's funds for a specified period of time, and thus enables the user to make economic decisions. 


What are the financial reporting and accounting standards?


The financial reporting and accounting standards are mandatory rules that the directors of every company must follow in the preparation of financial statements. The directors must in each financial year select the accounting standards that are most appropriate to the circumstances under which the Company is operating. 


Compliance with the accounting standards ensures that the financial statements are prepared to give a true and fair view of the financial position and performance of the Company.


The accounting standards address three important issues in the preparation of financial statements: (a) the recognition of assets and liabilities; (b) the disclosure of business transactions and events; and (c) the measurement of assets, liabilities, revenue, and expenses. See details of the accounting standards [here].