FINANCIAL-STATEMENTS.docx - FINANCIAL STATEMENTS final...

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FINANCIAL STATEMENTS - final product of the whole accounting process which represents the business - contained summarized information about the financial affairs of a firm, organized systematically as per the accounting principles Importance of Financial Statements 1. Shows the financial position of the business 2. Shows the financial performance & cash flow of the business 3. Reflects the financial image of the business Credibility – solvency, liquidity / capacity 4. Attracts stewardship of investor’s resources How the business utilizes the investments? Earnings per share (important for investors) Financial Reposting Standard Council / FRSC - responsible for setting the guidelines on the preparation of the financial statements - associated with GAAP Philippine Financial Reporting Standard / PFRSa - sets standards in accounting in the Philippines Users of Financial Statements 1. External Users not directly involved in the operation of the business outside the company Government, government agencies determine the allocation of resources regulate the activities of the businesses taxation policies

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