The financial statements of the company, represent its economic situation and are the main source of information that third parties have about its performance, so it is vitally important to know the different types of statements with the elements that characterize them.
The Financial Statements reflect the entire set of concepts of operation and operation of the companies, all the information that is shown in them must serve to know all the resources, obligations, capital, expenses, income, costs and all the changes that occurred in They carry out the financial year, also to support the planning and direction of the business, the decision-making, the analysis and the evaluation of those in charge of management, exercise control over the internal economic items and to contribute to the evaluation of the impact that it has on external social factors.
In Colombia, the use of Financial Statements and their elements is regulated in Decree number 2649 of 1993, the main objective of this article is to show the main classes of financial statements that are ultimately the main providers of information within organizations.
Taking into account the characteristics of the users to whom they are directed or the objectives that originate them, the Financial Statements are divided into:
- General purpose financial statements Special purpose financial statements
Attributes
For the information presented in the Financial Statements to satisfy the collective interests, it must be understandable, comparable, useful, relevant, neutral, reliable and verifiable.
General purpose financial statements
These States are those that prepare themselves at the end of a period to be known by indeterminate users, with the main intention of satisfying the public good in evaluating the capacity of an economic entity to generate favorable flows of funds. They must be characterized by their condition, clarity, neutrality and easy consultation. They are general purpose statements, the Basic Financial Statements and the Consolidated Financial Statements.
Basic Financial Statements
Balance Sheet: In this statement, passive assets and equity must be related, with the purpose that when recognized, the financial situation of the economic entity can be reasonably determined at a given date.
- Income Statement: The sum of income, costs, expenses and monetary correction, duly associated, should give us the results for the year. Statement of Changes in Equity Statement of Changes in financial position Statement of Cash Flows
Consolidated Financial Statements
They are all those who present the financial situation, the results of operations, changes in equity and in the financial situation, as well as the cash flows, of a parent entity and its subordinates, or a dominant entity and the dominated ones, such as if they were those of a single company.
General purpose statements are those that are prepared at the end of a period to be known by indeterminate users, while those of special purpose are those that are prepared to meet the specific needs of certain users of accounting information.
Special purpose financial statements
Special Purpose Statements are those that are prepared to meet the specific needs of certain users of accounting information. They are characterized by having limited circulation or use and by providing greater detail on some items or operations.
The following are Special Purpose States:
- The Initial Balance: At the beginning of its activities, every economic entity must prepare a General Balance that allows to know clearly and completely the initial situation of its patrimony. The Financial Statements of Intermediate Periods: Are those Basic Financial Statements that are prepared during the course of a period to satisfy the needs of the administrators, of the authorities that exercise inspection, surveillance or control. The Cost States: Are those that are prepared to know in detail the expenditures and charges made to produce the goods or provide services of which a Economic entity has derived its income. The Inventory Status: It is the one that must be prepared by checking in detail the stocks of each of the items that exist in the Balance Sheet. The Extraordinary States:They are those that are prepared during the course of a period as a base to carry out certain activities. The date of the same cannot be prior to a month of the activity or the situation for which it was prepared. The Liquidation States: They are those that must present an economic entity that has ceased its operations, to report the degree of progress of the process of realization of your assets and cancellation of your liabilities Financial Statements presented to the authorities subject to the classification rules and with the detail determined by them Financial Statements prepared on a comprehensive accounting basis other than accounting principles generally acceptedThe date of the same cannot be prior to a month of the activity or the situation for which it was prepared. The Liquidation States: They are those that must present an economic entity that has ceased its operations, to report the degree of progress of the process of realization of your assets and cancellation of your liabilities Financial Statements presented to the authorities subject to the classification rules and with the detail determined by them Financial Statements prepared on a comprehensive accounting basis other than accounting principles generally acceptedThe date of the same cannot be prior to a month of the activity or the situation for which it was prepared. The Liquidation States: They are those that must present an economic entity that has ceased its operations, to report the degree of progress of the process of realization of your assets and cancellation of your liabilities Financial Statements presented to the authorities subject to the classification rules and with the detail determined by them Financial Statements prepared on a comprehensive accounting basis other than accounting principles generally acceptedto report the degree of progress of the process of realization of its assets and cancellation of its liabilities. The Financial Statements presented to the authorities subject to the classification rules and with the detail determined by them. The Financial Statements prepared on a comprehensive basis of accounting other than generally accepted accounting principlesto report the degree of progress of the process of realization of its assets and cancellation of its liabilities. The Financial Statements presented to the authorities subject to the classification rules and with the detail determined by them. The Financial Statements prepared on a comprehensive basis of accounting other than generally accepted accounting principles
Notes to the financial statements
The notes, as a presentation of the accounting practices and disclosure of the company, are an integral part of each and every one of the Financial Statements, they must be prepared by the administrators subject to the following rules:
- Each note must be identified by numbers or letters and duly titled, in order to facilitate its reading and its crossing with the corresponding statements. When practical and significant, the notes should be referenced in the body of the financial statements. The initial notes should identify the economic entity, summarize its accounting policies and practices and matters of relative importance. The notes should be presented in a logical sequence, keeping as much as possible the same order of financial items. The notes are not a substitute for adequate accounting treatment in the Financial Statements.
As a final point we have that the financial statements are an unquestionable proof of the economic activity of the company, therefore it is vitally important to prepare them with the parameters described above.
