Based on the definition mentioned above it can be concluded that the financial report the company is the output of a process of information systems derived from the events of the economy that includes Revenue cycle, expense cycles, financial cycles recorded / inputted and processed in accordance with accounting principles applicable general. This was confirmed again by Scott (1986: 67) through the description of the process of information systems that include; Input, Processing, and Output / reports. This was confirmed again by Michael A. Diamond (1993: 22) as follows:
"Financial Statements are the principal product of the accounting information system, communicating to inteeerest userts information on a firm's financial position, its liquidity and profitability, and significant changes in its resources and obligations."
The opinion suggests that the financial report is the result of an accounting information system, as a communication medium for users to find out information about the company's financial position both in terms of liquidity and profitability, as well as significant changes to the available resources.
Financial statements prepared or manufactured with the intent to provide an overview or a progress report (Progress Report) periodically conducted by the management concerned. So the financial statements is historical as well as thorough and as a progress report financial report consists of data that is the result of a combination of: a fact that has been noted (recorded fact), principles and practices in accounting (accounting converntion and postulate ), a personal opinion (personal judgment).
Type of Financial Statements
The main types of financial reports and supporting financial report consists of:
A list which describes the balance of the company's financial position at a certain date.
calculation of profit / loss that describes the number of results, Cost and Profit / Loss of the company in a given period.
Sources and Uses of funds report. Here published sources and expenditures of the company during the period
Cash flow statement. Here is described the sources and uses of cash in a period.
Laproan cost of production which describe how and what elements are taken into account in the cost of production usatu goods.
Retained Earnings report, explaining the position of retained earnings which are not distributed to shareholders.
Statement of Changes in capital, capital position well explain the changes in the share capital in limited liability companies or limited liability company.
Janis financial statements of some of the above, will be described as follows:
a) Balance Sheet (Financial Position)
The balance sheet or balance list called statement of financial position of the company. This report describes the position of assets, liabilities, and capital at a given time. This report can be compiled every saaat and a hospitalization situation of financial position at that time. Contents / components of the balance sheet consist of:
1. Assets, Asset (Asset)
Asset is a treasure owned companies that play a role in company operations cash, inventory, fixed assets, assets which did not materialize, and others. Understanding these assets put forward by various parties as follows:
According to the Principal Accounting Board (APB) Statement (1970: 132) stated that:
"Economic wealth of companies, including the delayed loading, assessed and recognized in accordance accepted accounting principles."
Furthermore, the Financial Accounting Standards Board (FASB) (1985) gives the following definition:
"Asset is the possibility of economic benefits obtained or controlled in the future by certain institutions as a result of past transactions or events."
Based on these definitions above, it can be said that something is regarded as assets if in the future can be expected to provide a positive net cash inflow to the company.
Further classification of assets owned by the company consists of various kinds. In general, the classification of fixed assets consists of: 1) tangible fixed assets (Fixed Assets), and 2) Intangible fixed assets (Intangible Assets). Tangible fixed assets include all the items owned by the company with the purpose to be used actively in the company's operations, and has a period of relatively permanent usability. Tangible fixed assets that have a limited period of usefulness must be depreciated over the period of usefulness, and are presented in the balance sheet at book value (acquisition cost less accumulated depreciation). Which termaduk in this asset class are buildings, machinery and factory equipment, furniture and office equipment, vehicles and transport equipment, work tools garage, natural resource assets. Medium tangible fixed assets that have an unlimited period of usefulness, are presented in the balance sheet at cost. While intangible assets include the rights of preference (preferential) which are guaranteed by law, contracts, agreements and have a useful life in a relatively permanent.
Furthermore, according to Harnanto (1991: 357), for operating management investment (assets), covering the entire machinery and equipment and other plant equipmen as well as working capital to be managed or operated placed in the company's efforts to generate profits.
Based on the definition above shows that the operational point of view of investment, fixed assets is one of the important elements that should be the focus of attention for the company in its operations in relation to generate income / profit. Besides, for the purpose of maintenance conditions fixed assets both tangible and intangible fixed in productive conditions for companies required for depreciation and amortization as a process of allocation of the cost of fixed assets.
2. Liabilities / debts (Liabilities)
According to the definition given by APB that:
"Economic liability of a company that is recognized and valued seusuai accounting principles. Here liabilities including deferred credit balance that is not a debt or obligation. "
Based on the above definition, the economic liability for the company is defined as a surrender of property or services in the future. Furthermore, FASB gives definitions of the following obligations:
"... .kemungkinan Sacrifice economic wealth in the future arising from the company's obligation is now to provide property or provide services to others in the future as a result of a transaction or occurrence that has happened."
The definition above shows that the obligation to have three main properties; (1) the obligation exists, (2) the obligation can not be avoided, (3) the obligation that obliges the company has occurred.
Liability if categorized in accordance with the time period, then there is a short-term liabilities (Current liabilities) and long-term liabilities (long-term liabilities). According Harnanto (1991: 59), long-term debt is all debt that is due for payment beyond the time limit of one year from the balance sheet date or payment will not be made in the period of operating cycle, but longer than the deadline. Bonds payable hipoteik, bank debt (credit investments) are examples of long-term debt.
In the company's operation, long-term debt is a source of capital at risk, because it has a commitment to make a payment according to the number agreed upon, although the company at a loss though, so that the debt can only bear the risk exceeds the amount of their own capital. This is confirmed by Harnanto (1991: 304) that the greater the proportion of debt in the capital structure of the company, the greater the likelihood of inability to repay the loan and interest on the maturity date. The statement means that for creditors that the possibility of the participation of the funds they invest in the company, to stake the greater the risk of loss as well. As for the owners, especially common shareholders, adaaanya debt in the company is also a risk of its own against the possibility of losses facing of funds they invest. But the risk is also offset their hopes of obtaining a higher profit rate (profitability) as a result of using foreign capital. But keep in mind that the proportion of debt / foreign capital which will result in excessive management flexibility to switch on profitable activities that will be covered and faces many obstacles / tintangan.
3. Capital Owner (Owner's Equity)
Equity is a remaining rights to the assets of an institution (entity) after deducting liabilities. Category capital can be different for every company that is in a private company is the capital value of the owner's own capital. While the company consists of the company's paid up capital and capital from earnings (retained earnings).
b) Profit and loss statements (Profit & Loss)
Committee on Terminology provides definitions profit as the number derived from a reduction in the cost of production, other costs, and loss of income or operating income. Meanwhile, according to APB Statement defines income as excess / deficit of income over expenses for an accounting period.
From the definition above, the profit or loss represents the difference between a positive or negative difference obtained from the operating and non-operating company against costs in the accounting period that led to a change in the position of equity (net assets) of the company. This was confirmed again by FASB Statement by defining Accounting Income or Profit accounting as the change in equity (net assets) of an entity during a given period resulting from transactions and events or events that come from not the owner. Contents / components of the income statement consists of:
1. Income / outcome (Revenue)
Revenue / results (revenue) is the result of the sale / delivery of services by the company to the customer or recipient of services. According to Harahap (2002: 114) argues that:
"An income will be recognized as revenue in the period when the main activities needed to produce and sell goods and services that have been completed."
The definition emphasizes the recognition of revenue in terms of time. Viewed from the side, the time of revenue recognition can be an alternative; (1) during production, (2) during the production process is completed, (3) at the time of sale / delivery of services, (4) at the time of billing Cash.
2. Cost (Expense)
According to the APB defined as a decrease in the gross asset or an increase in the gross liability recognized and assessed according to accepted accounting principles derived from profit-seeking activities by the company. Meanwhile, according to FASB defines expense as an outflow of assets, the use of assets or the emergence of a liability or a combination of both during a period caused by the delivery of goods, the manufacture of goods, loading services, or the implementation of other activities is the main activity of the company.
Classification of costs consist of; (costs associated with earnings in that period, (2) costs associated with a specific period that is not associated with income, (3) the cost akrena practical reasons can not be associated with any period.
3. Profit and loss Incidental (Incidental Incidental Gains and loses)
According to FASB Equity Gains are rising value of transactions that are incidental and not the main activities of the entity and of transactions or other events affecting the entity except dive a certain period or the proceeds derived from the investment of the owner. While loses is the decline in equity from transactions that are incidental and not the main activities of the entity and of all transactions other events affecting the entity during a certain period except those derived from fees or granting to the owner (prive).
Understanding Financial Statements
4. Extraordinary (Extraordinary items)
Extraordinary items are events or transactions that materially affect that is not expected to occur repeatedly and are not considered to be a recurring thing in the process of regular operasiyang of sautu company. According to PAI criteria Extraordinary item is: (1) is abnormal (unusual), it means to have the level of abnormality that steeper and not related to the company's activities daily, (2) do not often occur, or are not expected to occur in the future which will come..
Reporting extraordinary items should be separated from the day-to-day business and are shown separately in the statement of income is accompanied by disclosure of the nature and amount.
Furthermore, according to Michael A. Diamond (1993: 23) that:
"... The four play financial statements are the balance sheet, the income stattement, the retained earnings statement, and the statement of cash flows."
The definition above shows that among the various financial reports is usually presented by the company, then there are four of them are primary financial statements that are commonly used are: neraraca report, income statement, statement of retained earnings, and cash flow statement.