Cash flow
Characteristics of financial information.
The characteristics of the financial statements must be based on the characteristics of accounting information in the bulletin A-1 principles generally accepted accounting principles, which are:
Utilidad.- Its informative content must be meaningful, relevant, accurate, comparable and timely.
Confiabilidad.- must be stable (consistent), objective and verifiable.
Provisionalidad.- contains estimates to determine information corresponding to each accounting period.
The essential feature of the financial statements will be to contain the information to reach a judgment. To this it must be characterized by being impartial and objective, in order not to influence the reader to a certain point of view responding to the characteristics of reliability and truthfulness.
Within the context of generally accepted accounting principles of the basic financial statements are historical, that report occurred facts and are part of the framework for the general user can weight the future.
The basic financial statements are:
The balance sheet showing assets, liabilities and stockholders' equity at a certain date.
The income statement showing revenues, costs and expenses resulting gain or loss in the period.
The statement of changes in stockholders' equity, showing changes in the investment of the owners during the period.
The statement of changes in financial position, indicating the resources and obligations of the company in the period were changed.
The notes to the financial statements are an integral part thereof, and aims to complement the states with relevant information.
Limitations on the use of financial statements.
Users of financial information should take into account the following:
Transactions and economic events are quantified by particular rules depending on the personal judgment of who performs them.
Since the financial statements are expressed in currency as their form of measurement should be considered to have a value that changes based on economic events.
The financial statements, especially the balance sheet are not intended to present the value of the business, but to present the value for the business, its resources and quantifiable obligations. The E. F. not quantify other essential elements of the company such as human resources, product, brand, market, etc.
conclusions
The generally accepted accounting principles in bulletin B-1 indicate all that concerns over financial reporting as reflected in the financial statements, the important thing in this information is to guide and basis for decision-making within of the entity. One can say that this information is the compass of a company to decide what measures and actions taken.
It is very important that this information follow accounting principles so that you can be objective because it follows these parameters, the information will be distorted causing a bad decision on users, it should be noted this point that financial information should not be a position or particular point of view, because its function is solely to reflect the financial situation of the company without leaning to any arbitrary conclusion.
Also of note and deepen the limitations of this information because they reflect the financial statements is not the business value this means that only the value of its assets and its obligations is reflected but not leaving aside other resources important in the overall value of a company.
To conclude mention that the criteria used to provide and make financial information should never get out of accounting principles and the notes accompanying the financial statements must have sufficient and relevant information to be noted and reported but should not be excessive information not to cause confusion among users.