Types of financial reports that need to be known in businesses

Types of financial reports is a collection of periodic reports reflecting the financial situation, business results, and cash flows of the enterprise. Financial reports provide useful information for business decision-making, risk management and legal compliance. This article will provide customers with an overview of the types of financial reports, report submission deadlines and Long Phan’s support services.

What are financial reports? The role of financial reporting for businesses

According to Clause 1 and Clause 2, Article 3 of the Law on Accounting 2015, financial statements are a system of economic and financial information presented in the form of reports and notes to financial statements reflecting the financial situation, business performance and cash flow of an accounting unit at a certain point in time or in a certain accounting period. Financial statements are prepared in accordance with Vietnamese Accounting Standards and current accounting regimes.

Financial reports play an important role in business operations. For managers, financial reports provide information to evaluate business performance and make investment and financial decisions. For investors, financial reports are the basis for assessing the financial situation, development potential and risks of a business. Financial reports are also a tool for businesses to fulfill their information disclosure obligations according to legal regulations.

Types of financial reports today

The Law on Accounting 2015 regulates types of financial reports including:

Balance Sheet

The financial position statement (also known as the Balance Sheet) reflects the assets and capital of the business at a certain time. This report provides information about the solvency, profitability and financial structure of the business.

Report structure:

• Assets: Includes short-term assets (cash, receivables, inventory…) and long-term assets (factories, machinery and equipment…).
• Liabilities: Includes short-term debt (accounts payable to sellers, short-term loans…) and long-term debt (long-term loans, bonds…).
• Equity: Reflects the owner’s capital contribution, undistributed profits and enterprise funds.

This report helps evaluate a business’s solvency, profitability from assets and overall financial structure.

>>> DOWNLOAD: Accounting balance sheet (Form No. B 01 – DN).

Income Statement

The business performance statement (also known as the Profit and Loss Statement) reflects a business’s revenue, costs and profits during an accounting period. This report shows the business performance of the enterprise, and its ability to generate profits from business activities.

Main ingredients:

• Revenue: Total value of goods and services sold.
• Expenses: Expenses incurred during the business process (raw material costs, labor costs, sales costs…).
• Profit: Business results after deducting costs from revenue.

This report shows whether a business has a profit or loss, thereby evaluating operating efficiency, identifying factors affecting profits and making appropriate business decisions.

>>> RESOURCES ABOUT: Business performance report template.

Statement of Cash Flows

The cash flow statement reflects the cash inflow and outflow of a business during an accounting period. This report provides information about a business’s ability to generate cash, pay its debts, and make investments.

Cash flow classification:

• Business activities: Proceeds from sales, provision of services, payments to suppliers, employees…
• Investment activities: Cash spent on purchasing fixed assets, proceeds from asset liquidation…
• Financial activities: Proceeds from loans, stock issuance, loan repayments, dividends…

This report helps managers and investors evaluate the ability to generate cash from business activities, the effectiveness of working capital management and the ability to meet financial obligations.

>>> DOWNLOAD: Cash flow statement template.

Notes to the Financial Statements

Notes to financial statements are a supplement to financial reports, providing detailed information about items in the report, applied accounting policies and other important information.

Explanation content:

• Accounting policy: Explain the applied accounting methods (for example: fixed asset depreciation method, inventory value calculation method…).
• Detailed information about items: Provides additional information about items in the financial statements (for example, details about receivables, liabilities…).
• Significant events: Report events that affect the financial situation of the business (for example: litigation, policy changes…).

Notes help readers better understand financial reports, increasing transparency and reliability of information.

>>> DOWNLOAD: Financial statement notes.

Other reports as prescribed by law

In addition to the main financial reports, businesses must also prepare and submit other reports according to legal regulations, depending on their size, business lines and form of organization.

Some popular reports:

• Tax reporting: Declare corporate income tax, value added tax…
• Statistical report: Provides statistical data on production and business activities.
• Environmental management report: Report on the implementation of environmental protection regulations.

Preparing and submitting full reports according to legal regulations helps businesses comply with the law, avoid legal risks and ensure sustainable business operations.

When must financial reports be submitted?

Clause 1, Article 29 and Clauses 1 and 2, Article 30 of the Law on Accounting 2015 stipulate the deadline for submitting financial reports as follows:

• Annual financial report: Submitted no later than 90 days from the end of the fiscal year.
• Quarterly financial reports: Submitted no later than 45 days from the end of the quarter.
• Mid-year financial report: Submitted no later than 60 days from the end of the first 6 months of the year.

Clause 2, Article 29 of the Law on Accounting 2015, Article 30 of the Law on Accounting 2015 stipulate cases where the deadline for submitting financial statements is extended.

Instructions for preparing standard financial reports

Preparing accurate financial reports and complying with legal regulations are key factors to ensure effective and transparent business operations. To prepare financial reports accurately and quickly, you need to pay attention to the following factors:

• Financial reports must comply with Law on Accounting No. 88/2015/QH13 and Vietnamese accounting standards (VAS) issued by the Ministry of Finance. Pay special attention to the regulations on form, content, and deadline for submitting financial reports to avoid violating the law.
• Accounting data is the foundation for preparing financial reports. Customers need to collect all legal and valid accounting documents as a basis for recording.
• Using professional accounting software helps automate data collection and processing, minimize errors and save time.
• Choose an accounting method suitable to the characteristics of business activities and legal regulations.

For example, for calculating inventory value, businesses can apply the first-in, first-out (FIFO), last-in, first-out (LIFO) or weighted average method.

• Financial reports need to be presented scientifically, clearly, and easily understood with full indicators and data according to regulations. Businesses should use tables and graphs to illustrate data, helping readers easily grasp information.

Consulting services and preparing financial reports for businesses in Long Phan

Long Phan provides professional financial reporting and consulting services, helping customers:

• Consulting on corporate financial management.
• Providing solutions for tax compliance, tax cost optimization and long-term tax planning.
• Evaluate operational efficiency, analyze profits and risks.
• Providing financial reporting services according to Vietnamese accounting standards (VAS).
• Check and review financial reports to ensure accuracy, transparency and compliance with regulations.
• Inspect and evaluate financial processes, risk management and internal control.
• Build a long-term financial plan.
• Support building sustainable business strategies through optimal financial solutions.
• Support in resolving disputes on financial issues, contracts, and debts.

Financial reports are an indispensable tool in corporate management. For advice and support on financial reporting, please contact the hotline 0906735386. Long Phan is committed to providing quality services, meeting all customers’ needs.