Quick Finance Tip - The Objective of Financial Reporting

The general purpose of financial reporting is to provide financial information about the reporting entity to all potential stakeholders in making decisions, which involves buying, selling, or holding equity or debt and providing other forms of credit.

Ultimately, it is to provide users with useful information on a company’s performance and financial position. Financial statement analysis is the use of data from financial statements to make economic decisions.

​The International Accounting Standards Board (“IASB”) and the Financial Accounting Standards Board (“FASB”) aims to develop a common foundation for standards that should be (i) principle based, (ii) internally consistent, and (iii) converged.