What Else is in Financial Reports - Other Statements
- 02:02
High-level overview of the statement of comprehensive income and the statement of changes in equity.
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If you've looked at a set of financial statements, you might have noticed that there are two other financial statements in addition to the income statement, balance sheet and cashflow statement. These are the statement of comprehensive income and the statement of changes in equity, although they might go by slightly different names. The statement of comprehensive income takes the net income from the bottom of the income statement and adds or deducts things that are made as adjustments directly to equity in the balance sheet. In other words, they are income or expense items that have not gone through the income statement. These adjustments are called other comprehensive income. Without getting too technical, these are things that could make their way into the income statement In future, for example, gains or losses on derivatives.The statement of changes in equity reconciles the beginning balance of each element of equity, like common stock and retained earnings individually with their ending balances. For example, if dividends have been paid to shareholders, this will not be shown in the income statement, but will impact how the retained earnings balance has changed over the year and will be clearly shown in this statement from an analysis perspective, most time is probably spent on the three main financial statements, but these two additional statements can provide additional insight into the operations of the company.