What Is Financial Statement Pdf

[Cecile Lilien]

Notall financial statements are created equally. The rules used by U.S. companies are called Generally Accepted Accounting Principles, while the rules often used by international companies are International Financial Reporting Standards (IFRS). In addition, U.S. government agencies use a different set of financial reporting rules.

The purpose of an external auditor is to assess whether an entity's financial statements have been prepared following prevailing accounting rules and whether any material misstatements are impacting the validity of results.

The three main types of financial statements are the balance sheet, the income statement, and the cash flow statement. These three statements together show the assets and liabilities of a business, its revenues, and costs, as well as its cash flows from operating, investing, and financing activities.

Financial statements show how a business operates. It provides insight into how much and how a business generates revenues, what the cost of doing business is, how efficiently it manages its cash, and what its assets and liabilities are. Financial statements provide all the details on how well or poorly a company manages itself.

Financial statements are read in several different ways. First, financial statements can be compared to prior periods to understand changes over time better. Financial statements are also read by comparing the results to competitors or other industry participants. By comparing financial statements to other companies, analysts can get a better sense of which companies are performing the best and which are lagging behind the rest of the industry.

Generally Accepted Accounting Principles (GAAP) are the rules by which publicly-owned United States companies must prepare their financial statements. It is the guideline that explains how to record transactions, when to recognize revenue, and when expenses must be recognized. International companies may use a similar but different set of rules called International Financial Reporting Standards (IFRS).

The FY 2021 Working Capital Fund Agency Financial Report (AFR) has been restated in the comparative FY 2022 Working Capital Fund AFR. The FY 2021 Balance Sheet is restated to correct an error. The impact of this error resulted in Intragovernmental Accounts Receivable and Other than Intragovernmental Accounts Receivable reported on the financial statements to be overstated and understated, respectively. DLA WCF recorded adjustments to properly classify accounts receivable related to deposit funds that are due from OUSD. The correction required a prior period adjustment to the FY 2021 Balance Sheet.

The FY 2021 General Fund Agency Financial Report (AFR) has been restated in the comparative FY 2022 General Fund AFR. In FY 2021, the Balance Sheet and Statements of Changes in Net Position were restated to correct an error that was made in a prior year. DLA GF made an adjustment to reclassify a Non-Expenditure Financing Source Transfer-In to an Unexpended Appropriations Transfer-In for funding received in FY 2014. The impact of this error resulted in an understatement in Cumulative Results of Operations and an overstatement in Unexpended Appropriations. As the funding source for the transfer-in originated from excess cash balances, not the appropriated funds, DLA GF recorded the adjustments to correct the FY 2021 Balance Sheet and Statements of Change in Net Position by decreasing Unexpended Appropriations and increasing Cumulative Results of Operations, resulting in no overall impact to DLA GF's Net Position.

The FY 2020 Working Capital Fund Agency Financial Report (AFR) has been restated in the comparative FY 2021 Working Capital Fund AFR. The FY 2020 Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position were restated to correct the misapplication of the proper accounting treatment and recognition of: (1) general property, plant and equipment, net for the transfer-in of capitalized assets and the related depreciation expense; and (2) accounts receivable for deposit funds in accordance with SFFAS 1, Accounting for Selected Assets and Liabilities, and SFFAS 6, Accounting for Property, Plant, and Equipment. DLA management concluded that the accounting for these transactions should be corrected and the necessary adjustments recorded. Specifically, DLA Working Capital Fund recorded adjustments to correct the errors for transfer-in of capitalized assets and accounts receivable for deposit funds on the Balance Sheet and the related the depreciation expense on the Statement of Net Cost. As a result, the FY 2020 Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position included within the FY 2020 Working Capital Fund AFR should no longer be relied upon due to the subsequent restatement and the misapplication of the proper accounting treatment and recognition for general property, plant and equipment, net for the transfer-in of capitalized assets and the related depreciation expense and accounts receivable.

The FY 2020 General Fund Agency Financial Report (AFR) has been restated in the comparative FY 2021 General Fund AFR. The FY 2020 Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position were restated to correct the misapplication of the proper accounting treatment and recognition of: (1) capitalized construction-in-process (CIP) cost that had been expensed; and (2) revenue earned and the related accounts receivable and advances from others and deferred revenue that were not recognized in the proper period in accordance with SFFAS 1, Accounting for Selected Assets and Liabilities, SFFAS 6, Accounting for Property, Plant, and Equipment, and SFFAS 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting. DLA management concluded that the accounting for these transactions should be corrected and the necessary adjustments recorded. Specifically, DLA General Fund recorded adjustments to correct the errors for capitalized CIP cost, accounts receivable, and advances from other and deferred revenue on the Balance Sheet and revenue earned and not recognized in the proper period and gross cost improperly expensed on the Statement of Net Cost. As a result, the FY 2020 Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position included within the FY 2020 General Fund AFR should no longer be relied upon due to the subsequent restatement and the misapplication of the proper accounting treatment and recognition for capitalized CIP cost that had been expensed and revenue earned and the related accounts receivable and advances from others and deferred revenue that were not recognized in the proper period.

The FY 2020 Transaction Fund Agency Financial Report (AFR) has been restated in the comparative FY 2021 Transaction Fund AFR. The FY 2020 Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position were restated to correct the misapplication of the proper accounting treatment and recognition of: (1) inventory and related gains and losses; (2) advances and prepayments; and (3) accounts payable and the related gross cost in accordance with SFFAS 1, Accounting for Selected Assets and Liabilities; SFFAS 3, Accounting for Inventory and Related Property; and SFFAS 5, Accounting for Liabilities of the Federal Government. DLA management concluded that the accounting for these transactions should be corrected and the necessary adjustments recorded. Specifically, DLA Transaction Fund recorded adjustments to correct the errors for inventory and related property, net, advances and prepayments, and accounts payable on the Balance Sheet and related gains and losses and gross cost on the Statement of Net Cost. As a result, the FY 2020 Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position included within the FY 2020 Transaction Fund AFR should no longer be relied upon due to the subsequent restatement and the misapplication of the proper accounting treatment and recognition for inventory and related property, net, advances and prepayments, accounts payable, and the related earned revenue and gross cost.

The FY 2018 Transaction Fund Agency Financial Report (AFR) has been restated in the comparative FY2019 Transaction Fund AFR. The FY 2018 Statement of Net Cost is restated to correct the misapplication of the revenue recognition accounting principles in accordance with SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting. Specifically, exchange revenue was being recorded and presented on a net basis, whereby revenue and cost of goods sold were recorded and presented as net revenue. DLA concluded that the accounting for the revenue transactions should be corrected and adjustments were recorded by DLA, to correct the error and to present revenue and cost of goods sold on a gross basis on the statements of net cost. As a result, the FY 2018 Statement of Net Cost included within the FY 2018 Transaction Fund AFR should no longer be relied upon due to the subsequent restatement for the misapplication of the revenue recognition accounting

The Financial Report of the United States Government (Financial Report) provides the President, Congress, and the American people with a comprehensive view of the federal government's finances, i.e., its financial position and condition, revenues and costs, assets and liabilities, and other obligations and commitments. The Financial Report also discusses important financial issues and significant conditions that may affect future operations, including the need to achieve fiscal sustainability over the medium and long term.

The Department of the Treasury, in coordination with the Office of Management and Budget (OMB), prepares the Financial Report, which includes the financial statements for the U.S. Government. The Government Accountability Office (GAO) is required to audit these statements. The Financial Report is compiled primarily from individual federal agencies' audited financial statements and related information included in the agencies' financial reports. Inspectors General are generally responsible for annually auditing the financial statements for their respective agencies. The agency and governmentwide financial statements are generally required to be prepared in conformity with U.S. Generally Accepted Accounting Principles (GAAP) as promulgated by the Federal Accounting Standards Advisory Board (FASAB).

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