Financial report means any report about monitory matters. In other words a financial report is about the transactions that have financial effects. To run a business financial reports play important role as relevant financial information is transmitted to relevant users inside and outside the entity to help them in making decisions. For example; bank statement, aged debtors analysis report etc.
Some financial statements are prepared on regular basis at equal intervals and some are prepared as and when needed. Some financial reports are meant only for management and some are communicated to people outside the entity as well.
Financial statements on the other hand are also financial reports. But in the business and accounting the term financial statement has more of a formal status.
Usually financial statements refer to either a statement included in the complete set of general purpose financial statements or a complete set of general purpose financial statements. And due the same reason whenever the term financial statement is used, it is often assumed that a report is about entity’s financial position, financial performance, cash flows or fluctuations in equity.
The term financial statement is usually used for all or any of the following statements:
- Statement of financial position
- Statement of Comprehensive Income or Income Statement
- Statement of Cash Flows
- Statement of Changes in Equity
As said earlier that financial statements are in fact financial reports but presented following a certain set of instructions as given by applicable financial reporting framework. For example International Financial Reporting Standards.
Majority of financial reports for internal purposes have such format or presentation rules that are set by the management or the user himself and sometimes no particular format is followed. In addition to that some financial reports are prepared on regular basis after equal intervals and some are prepared only when they are needed and are named as contingency reports. Financial statements are one of such reports that are prepared on regular basis as specific entities are required to do so according to applicable laws.
In the end, again there is no difference between the terms financial statement and financial report. But their usual interpretation and meaning in the financial and accountancy world is somewhat different.
Is not a financial statement the record of the overall financial picture and a bank statement is a look at a specific set of records……from an accounting or auditing point of view are they not the same except that financial statement is a macro look and bank statement is a micro look?