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Information > Financial Terms > This page Financial Reporting Financial reporting includes not only financial statements but also other means of communicating information that relates, directly or indirectly, to the information provided by the accounting system. Financial reporting is intended primarily to provide information that is useful in making business and economic decisions. Financial reporting is a broad concept encompassing financial statements, notes to financial statements (and parenthetical disclosures), supplementary information (such as changing prices disclosures and oil and gas reserves information), and other means of financial reporting (such as management discussion and analysis, and letters to stockholders). Financial reporting is but one source of information needed by those who make economic decisions about business enterprises. The appended table illustrates the relationship of financial reporting to other information useful for investment, credit, and similar decisions. The primary focus of financial reporting is information about earnings and its components. Information about earnings based on accrual accounting usually provides a better indication of an enterprise's present and continuing ability to generate positive cash flows than that provided by cash receipts and payments. BIBLIOGRAPHY FINANCIAL ACCOUNTING STANDARDS BOARD. Accounting Standards: Statements of Financial Accounting Concepts, 1987. Back to Information |