The Controller's Guide to Financial Statement Preparation and Presentation

Learning Objectives

• To explain the purpose of the FS.
• To explore how to prepare a BS, IS, statement of SE, and SCF.
• To identify basic analytic ratios for the BS, IS, and SCF.
• To analyze the components of notes to the FS.
• To identify the need for and uses of supplemental information to the FS.

Course Description

One of the important roles of any member of the financial team, including the controller, may be involved in the preparation of the company's financial statements. Even if that responsibility falls within the office of the CFO, the controller, and other finance personnel must understand how their transitions recorded impact the financial statements. 

Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form that is easy to understand. 

They typically include four basic financial statements accompanied by a management discussion and analysis:

1. A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owner's equity at a given point in time.
2. An income statement may have varying names including a profit and loss report (P&L report), a statement of comprehensive income, or a statement of revenue & expenses.  This report is on a company's income, expenses, and profits over a stated period. A profit and loss statement provides information on the operation of the enterprise. These include sales and the various expenses incurred during the stated period
3. A statement of changes in equity or “statement of equity” also called “statement of retained earnings” reports on the changes in equity of the company over a stated period.
4. A cash flow statement reports on a company's cash flow, particularly its operating, investing, and financing activities over a stated period.

A balance sheet represents a single point in time, where the income statement, the statement of changes in equity, and the cash flow statement each represent activities over a stated period.

For large corporations, these statements may be complex and may include an extensive set of footnotes to the financial statements, management discussion and analysis, and supplementary information. The notes typically describe each item on the balance sheet, income statement, and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.

Join this CPE Accounting Webinar of our Controllership Series to understand the preparation and presentation of financial statements.

Our courses on IFRS | GAAP might interest you. 

Overview

• Financial statement basics

  12 mins
• Balance sheet preparation

  21 mins
• Income statement

  36 mins
• Shareholder equity statement

  53 mins
• Cash flow statement

  70 mins
• Notes to the financial statements

  91 mins
• Income statement terms

  109 mins