Comparatives in the statements

It happens so often in practice – you prepare the main statements with current and prior year figures, but when you get to the notes and the text part, it’s often neglected that those figures also need comparatives. 

The reason why statements are required to also give comparatives is inherently in the name “comparative” – people need to compare figures given. They need to compare the information given to assess how you’re doing. For an example if you’re only showing this years loan liabilities and no prior year balances how would we know if you’ve taken any new loans or repaid anything? I believe you would want to give the users of the statements this information. And it’s not only balances in the statements, as I said, it’s also the notes and the text. It’s often neglected because it’s not in the form of a table. With the table you’d know that there needs to be two columns, but in the text it’s easier to overview this requirement.

One thing I’d also like to state and ask that you keep in mind is that those comparatives always need to be correct. It’s first off keeping the groupings and accounting methods similar (consistency), but what I mean is simpler than that. What I’ve seen often happen is that someone would just take the text from prior year, change the current period figures, but forget the comparatives in brackets. Why? I really don’t know, but it happens. So just make it a habit of yours to make sure this doesn’t happen with you.