Financial statements are also called general-purpose statements, referring to both their coverage and limitation. The objective of general-purpose reporting is to provide financial information as a basis for decision making by primary users, consisting of investors and creditors. They decide whether to provide resources to an enterprise based on its financial position, performance, and cash flows. These primary users have distinct levels of information needs, reporting preferences, and urgency.

It will be impractical, difficult, and expensive to prepare separate reports in diverse formats and levels of detail in varying frequency for each user. Instead, general-purpose statements provide the common needs of most users useful for decision making. It will not satisfy all the information needs of all users. Other detailed information will be covered in separate special reports. However, general-purpose reports observe certain standards of reporting and preparation and have characteristics to ensure usefulness of information for decision making, in the ordinary course of business.

MAIN PRESENTATION

Click the image below for the main presentation. It will be opened in a separate window. Complete the presentation’s activities and requirements. Completion status is collected, which will be submitted to your organization if requested. After completing the presentation, click the Mark Complete button, above, which will then be active.

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DISCUSSION

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