Definition of Financial Accounting
Financial accounting is the process of recording, summarizing and reporting the myriad of transactions resulting from business operations over a period of time. These transactions are summarized in the preparation of Financial Statements, including the Financial Position also called as Balance Sheet, Income Statement and Cash Flow Statement that encapsulate the company’s operating performance over a specified period.
Breaking Down of Financial Accounting
Financial accounting utilizes a series of established accounting principles. The selection of accounting principles to use during the course of financial accounting depends on the regulatory and reporting requirements the business faces. The Companies are required to perform financial accounting reports in accordance with Singapore Financial Reporting Standards and based on International Financial Reporting Standards. The establishment of these accounting principles is to provide consistent information to creditors, investors, regulators and tax authorities.
Financial Accounting Reporting
Financial reporting occurs through the use of financial statements. The financial statements present the five main classifications of financial data: revenues, expenses, assets, liabilities and equity. Revenues and expenses are accounted for and reported on the income statement. Financial accounting results in the determination of net income at the bottom of the income statement. Assets, liabilities and equity accounts are reported on the balance sheet. The balance sheet utilizes financial accounting to report ownership of the future economic benefits of the company.
Financial Accounting Method
Financial accounting is to be performed using accrual method in Singapore. Accrual accounting entails recording transactions when the transactions have occurred and the revenue is recognizable.
Comparison between Financial Accounting and Management Accounting
The key difference between financial and management accounting is that financial accounting aims at providing information to parties outside the organization, whereas management accounting information is aimed at helping managers within the organization make decisions. Financial statement preparation using accounting principles is most relevant to regulatory organizations and financial institutions. Because there are numerous accounting rules that do not translate well into business operation management, different accounting rules and procedures are utilized by internal management for internal business analysis.
Accounting & Financial Statements Services
At ACHI, we will help manage your needs of preparation of un-audited Financial Statements according to the standards set by the relevant Authorities. Our experts will assure to pay attention to the results because that is the best way to develop a plan that can help accomplish those results. Our experts will manage the preparation of un-audited Financial Statements with perfection that your company will smoothly reach the level of submissions with the relevant authorities in due course that you have always wanted in your management policies.