Financial Statements

A Company’s Annual Accounts are comprised of the three Financial Statements, the Profit and Loss (P&L), the Balance Sheet and the Cash Flow Statement.

There are three Financial Statements which together make up a company’s Annual Accounts. In general, they are prepared under one of two main Accounting Standards, GAAP (Generally Accepted Accounting Principles) – U.S. financial reporting and IFRS (International Financial Reporting Standards) which is followed in 90 countries. The two Standards have merged and are now quite similar. The three financial statements are the Profit and Loss (P&L), which is a statement of Income & Expenses over the last 12 months. The Balance Sheet, a snapshot of the Company’s Assets and Liabilities and the Cash Flow Statement, focusing on cash transactions and the overall cash position.