Wednesday, 14 March 2018

Financial Management - Types of financial statements & Reports

Financial Management

The financial management here is the use of finance due to the buying and selling by the company to its customers. The use of the financial be challenged should be entailed to the shareholders. In addition the company often incurred debts will eventually give rise to the right of your billing or accounts receivable to a subscription is very closely related to the requirements of the credit given. While the collection of accounts receivable is not exactly at the time that has been set but the majority of the receivables will be collected within a period of one year and less.

Introduction to Financial management

With tops that then accounts receivable is included as one of the components of the current assets of the company. To be accountable about the operations, whether going on debts, or the finance allocated in with corporate interests. The activities of the company to report to shareholders either through a balance sheet or profit loss report is usually a considerable portion of current assets and therefore need to get serious enough attention so that this can be estimated receivables calculated in a way that is as efficient as possible. Because accounts receivable that are not billable is the factor that will be detrimental to the company.

In other words not collectible accounts receivable from subscription, is a shared responsibility among the functionaries of the company. To anticipate the onset of loss due to non-billed accounts receivable, then before the company make loans or loan before, adding to the company's advance party held an evaluation about the State or economic ability of candidates buyers.

Thus, the anticipation of record-keeping that can cause the loss of the company the company is usually less precisely the recording carried out on part of the bookkeeping, so there is confusion could happen cause losses the company, in addition to less coordination because parts of the marketing and purchasing means  checks between revenue with spending less accurate.

The required record-keeping is accurate which should not be ignored by the company, so that any errors can be reduced will have an impact on companies that could be spared from any losses experienced by the parties, so that the company needs to be taken into account the possibility of loss.non-billed receivables losses, is the question that arose after the transaction sale of goods and services it is frequently known in the relatively long period of time.

To anticipate the occurrence of risk of loss as explained above, it is necessary to determine the standard of great seriousness of granting loans to the subscription. In

Types of financial statements

Analysis of financial statements of companies closely related to the field of accounting is essentially an activity records, analyze, and interpret data from finance companies and other institutions with his activities related to the excrement and production of goods and services.


The financial condition and results of operations of the company which is reflected in the financial reports of the company in fact is the end result of the accounting activities the company.

Understanding the above as information about the financial condition of the company's operating results that are useful to many parties, both parties that exist within the company and outside the company. The leadership of the company held financial report analysis in a company will be able to know the State of the financial development of the good results achieved in the financial statement analysis is achieved as well as success and failure on a while ago. Of the financial statements is important for compilation of wisdom that will be done.

The financial statements drawn up in order to provide information to the various parties made up of balance, loss of profit reports, report parts earnings withheld or private equity report. Financial position changes and reports or report source and use of funds.

The balance sheet describes the company's financial condition on a certain date, generally at the end of the year at the time of the closing of the book. This balance sheet assets (property owned by the company), the company's obligation to pay the debt with money or other assets to another party at any given time to come and its own capital (surplus assets on top of the debt).

The company's income statement shows the results obtained from the sale of goods over services and fees incurred in the process of the achievement of results. The report also showed net income or net loss as a result of the company's operations.

The spider section report on hold, that is used in the company that shaped the company, shows an analysis of the change of the magnitude of the part of the profit on hold for an extended period. While the report's own capital for the company and the company in the form of communion, summarizes the changes in the magnitude of the owner or owners of the capital during a certain period.

Report a change of financial position shows the flow of working capital during a certain period. This report shows the sources of working capital which has been obtained and the use or expenditure of working capital that had been made during a specific time period.

The financial statements as the answer to the external coverage should be arranged in such a way, so that:

1. Satisfy the requirement :

  • Provide financial information regarding a particular company quantitatively, in order to meet the purposes of users in taking economic decisions.
  • Presenting reliable information about the financial position and changes in net worth of the company.
  • Financial information that can help the users in estimating ability gain profit from the company.
  • Presenting the necessary information about a change in the property and liability, as well as uncovering the right other information in accordance with the purposes of the users.

2. Achieve quality as follows:

a. Relevant
b. clear and understandable
c. can be tested for truth
d. Reflect the State of the company
e. can be compared
f. Complete
g. neutral.

Types of financial reports

Understanding the company's financial reports that are spotted accounting is a business language can provide information of business conditions and the company's business results in a certain period to serve as a basis for decision making parties interested in accounting, the information in question is the financial statements consist of a list-a list that shows the financial position of an enterprise activity results, and for one period.

To understand more about the financial statements below will be expressed by some understanding the analysis of financial statements, the financial statements were drawn up two lists by accountants at the end of the period for a company. Two of that list are the balance sheet and financial position or list a list of income or profit loss list.

The term financial reports that include balance sheet, profit loss reports, report a change of financial position can be presented in a variety of ways such as reports or cash flow statement  funds and Note financial statements, analysis of financial statements and other material explanation is an integral part of the financial statements.

Based on understanding of the financial statements which have been addressed above, it can be noted that the analysis report is the product or the end result of an accounting cycle. Financial report this was the information materials for the wearer as one ingredient in the decision-making process. In addition the information materials of analysis of financial statements as well as liability or accountability and can also as an indicator of the success of an enterprise.

1) Components of financial statements

To meet the interests of the users of the financial statements that include investments now and potential investments, employees, supplier lending and other business credit, customer, government as well as the institutions and the community. In using financial reports to meet several needs different information.

Based on the above, the bank's financial reports should be prepared based on accounting standards Money and Special Banking Accounting standards of Indonesia are as follows:
  1. Balance sheet
  2. Report commitment and contingency
  3. Income statement
  4. Cash flow statement
  5. Notes to financial statements.
Financial reporting functions and usability in delivering accurate information and effectively for the benefit of users of the financial statements.

2 Basic presentation of financial statements)

The submission of the financial statements of the bank should be a list of rupiah currency. In this case the bank has assets liabilities commitments as well as contingency in foreign exchange should be presented to in rupiah with the Middle exchange rate must use that applies on the date of the report To the capital paid in foreign currency are translated with the conversion rates are adopting Bank Indonesia at the time of paid-in capital.

As for the definition of the Middle exchange rate is the exchange rate and selling of Bank Indonesia were divided two at a time when the date of the report. Next basic assumptions the preparation of the financial statements drawn up on the basis of accrual. With these basic transactions and other events are recognized when the incident and not at the time of cash or cash equivalents received or paid and recorded in the accounting records and reported in the financial statements in the period in question.
The report was compiled in charity provides information to users not only past transactions that involve the acceptance and payment of cash in the future as well as the resources that achieve cash to be received in the future.

3) Purpose financial report

The purpose of the financial statements - the financial position and performance of the company's cash flow that is beneficial for a large part of the circle of the use of reports in the framework of economic decisions as well as demonstrating accountability  management of the use of the resources entrusted to them. '

Financial statement drawn up for the purpose of this joint is largely meets the needs of users. However, the financial statements do not provide all the required information that allows users in terms of economic decision making because in General can illustrate the financial influence of the happenings of the past and are not required to provide non financial information.

Financial statements also show what management or accountability or management of the resources entrusted to him.

Furthermore, the aim of the report is descriptive and this report influenced the following his studies about the purpose of the financial statements. In this aiming financial report financial statements are grouped, as follows:

A. special purpose

The specific purpose of financial reporting is to present the financial position, the results of reports and other financial position changes are reasonable and in accordance with GAAP.

B. General purpose

As for general purpose financial statements, as follows:

(1) Provide reliable information about the source of economic resources and obligations of the company with the intention of:
  • Assess the strengths and weaknesses of the company
  • To show the financial position and investment
  • The assess its ability to resolve its debts
  • Shows the capability of the resources that exist for the growth of the company.
(2) Provide reliable information about the source of that net worth is derived from business activities in search of profit with the intention, as follows:

  • Gives an overview of the expected dividends of shareholders.
  • Indicates the company's ability to pay its obligations on creditors, suppliers, employees, tax, to raise funds for expansion.
  • Provide information to management for used right in the performance of the functions of planning and monitoring capabilities.
  • Indicate the skill level changes get profit in the long run.
(3) Providing financial information that can be used to estimate the potential of the company generates profit
(4) Provide other required information about the change of property and liabilities.
(5) User reports determines this standard.

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