Natalia Alva In: Category - Accounting in CorporatesWhat are components of financial reporting?financial reporting ShareFacebook1 AnswerVotedRecent Palaktripathi 2020-08-11T21:17:04+05:30Added an answer on August 11, 2020 at 9:17 pm This answer was edited. To begin with, financial reporting is mainly of two types: External and Internal. Reports are prepared for stakeholders (external) as well as the managers (internal) of the organization. The different components of financial reporting are as follows:1. The financial statements of a company- the income statement, balance sheet, cash flow statements, and the statement of shareholders equity.2. The notes to financial statements3. The quarterly and annual reports of a company4. Prospectus5. Management discussion & analysis1. The financial statementsIncome statement – The income statement of a company shows the revenues, expenses, net income, and earnings per share. It is the most important financial statement because it depicts the overall performance of a company.Statement of financial position – It comprises of a companies assets, liabilities, and equity.Cash flow statement – A cash flow statement shows the monetary position of a company with the help of cash inflows and outflows during a particular financial period.Statement of equity – This financial statement shows the changes in owners’ equity over a financial period.2. The notes to financial statementWhile recording and classifying the above mentioned financial statements in the books of accounts, the accountants have to maintain various notes to separately show the working. These notes comprise of adjustments such as depreciation, interest, dividends, prepaid expenses, accrued income, etc.3. The quarterly and annual reports of a companyThese types of reports are usually prepared in the case of listed companies. These reports comprise of the financial statements and their notes to accounts.4. ProspectusIn terms of finance, a prospectus is a document that portrays the financial security for potential buyers. It is usually recorded in the financial reports of those companies that are going for IPOs.5. Management discussion and analysisThe preparation of a financial report involves the approval at all managerial levels and close analysis to avoid any kind of mistakes. However, this usually takes place in the case of public companies. Hope this helps.0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerCancel replyYou must login to add an answer. Username or email* Password* Captcha* Click on image to update the captcha. Remember Me! Forgot Password?