Primary Objectives of Financial Reporting

 Providing valuable information to different parties who

expect financial information of a company in order to
get economic decisions
 Providing valuable information in order to get future
cash flow estimates
 Providing information with respect to the company
resource utilization and accountability

Purpose of financial statements:

Financial statements are a structured representation of the

financial position and financial performance of an entity.
The objective of general purpose financial statements is to
provide information about the
I. Financial position
II. Financial performance and
III. Cash flow of an entity

That is useful to a wide range of users in making economic

decisions. Financial statements also show the results of
management's stewardship of the resources entrusted to it. To
meet this objectives, financial statements provide information
about an entity's:

I. Assets
II. Liabilities
III. Equity
IV. Income and expenses, including gains and losses
V. Other changes in equity, and
VI. Cash flow

This information, along with other information in the notes,

assists users of financial statements in predicting the entity's
future cash flows and in particular, their timing and certainty.