The Primary Financial Statements and Disclosure Notes

Financial statements and associated disclosure notes are among the most important pieces of documentation that a company produces. Financial statements have to be presented fairly in all material respects. Reporting entities applying FRS 102 are required to make an explicit and unreserved statement of compliance with FRS 102 in the notes to the financial statements. Financial statements must be prepared by entities at least once a year. The statement of financial position (commonly referred to as the ‘balance sheet’ in the UK and Republic of Ireland) is the primary statement that shows what the company owns and what it owes. The statement of comprehensive income and the income statement is essentially the profit and loss account. The purpose of the primary financial statement or cash flow statement is to show how the reporting entity has generated and spent cash during the accounting period.