One thing is the purpose of the report and how to reach this goal, but what does the report itself consist of and how it’s built up is another story. Well, it does help to keep the report structured so it will help you on reaching the end objective of the Annual Report.

First things first the Annual Report kicks of with the financial position statement, which is the balance sheet. It tells the users where exactly the company is with its operations, assets owned and liabilities taken. Then to follow is the results for the reporting year – income and expenses – presented on the income statement.  An added statement coming then (“added” in the sense that it’s prepared just for the report and not kept separately during the year) is the statement of cash flows that represents the cash inflows and outflows, which occurred over the reporting year. It really gives the users an idea how your company is using and generating the most liquid resource of them all, the cash. Another added statement is the statement of changes in owner’s equity that presents to users the usage of given funds.

With this the statements are presented, but bear in mind that there are notes to follow. Notes to the statements we just named, but also about the significant accounting policies used in compiling the statements themselves. Pretty much how the notes are built up is as follows:

–               The accounting principles or the framework if you may that was used to compile and present the statements;

–               Notes to the statements themselves in the order the statements are presented (i.e. if you start of with a balance sheet, your first note is about the first significant line item on the balance sheet).

Remember, as we mentioned, the Annual Report should be as structured as possible presenting all required components in manner which they are easily follow able and readable.