Businesses and companies have various reporting requirements to meet a range of regulations and necessities. How a set of financial accounts are presented and prepared is usually determined by applying the Australian Accounting Standards, as produced by the Australian Accounting Standards Board (“AASB”). These standards are now amended to accommodate the necessity to be able to produce accounts by applying common standards from around the world and the current AASB’s have an equivalent International Financial Reporting Standard (“IFRS”). Generally there are two types of financial reports that can be produced by a business. They are:
Special Purpose Financial Reports
A special-purpose financial report is intended for presentation to a limited group of users or for a specific purpose. For example, special-purpose financial statements are prepared for tax reporting, bank reporting, and industry-specific reporting. Most SME’s (Small to Medium Enterprises) and not-for profit entities will produce a simple profit and loss and balance sheet, in any format that the business requires or desires them to be in by following specific guidelines or reporting requirements established by the directors, owners or members.
General Purpose Financial Reports
General purpose financial reports provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity. General-purpose financial statements are issued throughout the year and includes a balance sheet, income statement, statement of owner’s equity/retained earnings, and statement of cash flows.
These reports are prepared by applying the Australian Accounting Standards and will generally follow a specified format although there still remains some ability to vary this. These reports are prepared by entities as determined under the Corporations Act and the application of the Statement of Accounting Concepts. As a general guide any company that has a large number of employees, foreign ownership or a perceived high number of end users that are reliant on the financial accounts to make decisions regarding the application of their resources, will prepare general purpose financial reports.
If you need reports prepared, we have a team of experts with a wide range of skills that can assist your business to produce the accounts while meeting your requirements on a timely and cost effective basis. These can range from IFRS level to Special Purpose bank financials.
If you would like any further information on the above, please contact one of our tax accountants at The Quinn Group on (02) 9223 9166 or submit an online enquiry.