Present financial reports to others

Consider the structure and format 

The Deloitte publication Model Special Purpose Financial Statements: Improving Disclosure³⁰ discusses the updates and appropriate structure and format of financial statements. Several sections in the publication are adapted on a verbatim basis. 

Preparers of special purpose financial statements should consider the specific information needs of the special purpose users to determine the level of disclosure necessary to satisfy those needs. This may require disclosing information in addition to that illustrated in these financial statements.

Comply with published minimum requirements

Minimum general requirements relating to the format of the financial statements are included in AASB 101 Presentation of Financial Statements, and AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors and have been implicitly applied in the model financial statements. 

These include:

1. An entity shall identify the financial statements and distinguish them from other information in the same published document.
2. An entity shall present a complete set of financial statements (including comparative information) at least annually. 
3. When an entity changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, an entity shall disclose, in addition to the period covered by the financial statements:
   1. the reasons for using a longer or shorter period, and
   2. the fact that amounts presented in the financial statements are not entirely comparable.
4. An entity shall identify each financial statement and the notes. 
5. An entity shall display the following information prominently, and repeat it when necessary for the information presented to be understandable:
   1. the name of the reporting entity or other means of identification, and any change in that information from the end of the preceding reporting period (for example, to give a proper understanding, the change of name may be disclosed on the cover of the annual report and repeated in the directors’ report, the directors’ declaration, auditor’s independence declaration, independent auditors report and on the face of the financial statements), 
   2. whether the financial statements are of the individual entity or a group of entities,
   3. the date of the end of the reporting period or the period covered by the set of financial statements or notes,
   4. the presentation currency, as defined in AASB 121 The Effects of Changes in Foreign Exchange Rates, and 
   5. the level of rounding used in presenting amounts in the financial statements.
6. An entity shall retain the presentation and classification of items in the financial statements from one period to the next unless: 
   1. it is apparent, following a significant change in the nature of the entity’s operations or a review of its financial statements, that another presentation or classification would be more appropriate having regard to the criteria for the selection and application of accounting policies in AASB 108, or
   2. an Australian Accounting Standard requires a change in presentation.

Include specific disclosures

Specific disclosures are required in financial reports of public companies listed on a stock exchange in Australia. The Australian Securities and Investments Commission (ASIC) has published guidance on the specific disclosures that must be made in financial reports. This guidance includes details about disclosures required for the income statement, balance sheet, cash flow statement, changes in equity, notes to the financial statements, and accounting policies.

Public companies must disclose their accounting policies, including how they have accounted for revenue, expenses, assets, and liabilities. They must also disclose any changes to their accounting policies during the year.

Public companies must also disclose any significant events or transactions that have occurred since the end of the reporting period.

Where the following is not disclosed elsewhere in information published with the financial statements, the information shall be disclosed in the financial statements:

1. The domicile and legal form of the entity, its country of incorporation and the address of its registered office (or principal place of business, if different from the registered office). For a listed entity, this information would normally be disclosed in additional securities exchange information. However, non-listed entities will need to ensure that this information is specifically included in the financial statements. These disclosure requirements are illustrated in note one to the model financial statements.
2. A description of the nature of the entity’s operations and its principal activities, complying with the Corporations Act 2001 directors’ report requirements, in relation to principal activities, will ensure compliance with these requirements. This disclosure requirement is illustrated in the directors’ report.
3. The name of the parent and the ultimate parent of the group.
4. If it is a limited life entity, information regarding the length of its life.

Add notes

Financial statement notes are the supplemental notes included with a company's published financial statements. Notes explain the assumptions used to prepare the numbers in the financial statements and the company's accounting policies.

The notes shall:

• present information about the basis of preparation of the financial statements and the specific accounting policies used
• disclose the information required by Australian accounting standards that are not presented elsewhere in the financial statements
• provide information that is not presented elsewhere in the financial statements but is relevant to an understanding of any of them

The structure and format of this publication are adapted by non-reporting entities and are therefore synonymous with the structure and format that conform to organisational requirements. For the full report on the model special purpose financial statements, click here. ³¹

Present the data effectively 

While information is meaningfully summarised in financial statements, not all stakeholders see them as relevant in this format. You must present information in a format they can understand to make informed decisions about the business. 

Financial information can be quite overwhelming. Not everyone wants every figure and all the details of the analysis. While some love numbers, others may not know what the numbers mean to their respective departments, area, or life. 

When delivering a presentation, accuracy and clarity are key. Slides (if used) should be designed to support the speaker, not overshadow them. The goal is to help the audience understand the key points of the presentation. 

There are a few things to keep in mind when designing slides: 

• use simple fonts and avoid too much text on each slide
• stick to a single message or point per slide
• use images and graphs to illustrate your points
• be concise - people won't have time to read through a lot of text
• use language suited to your audience 

Language suited to your audience is clear and easy to understand. More about tailoring your language to suit is included in the next topic.

When giving a presentation on financial reports, it is important to use language that is appropriate for the audience. In some cases, it may be necessary to provide more detailed information to certain individuals within the audience, while summarising the main points for others. It’s also important to be aware of nonverbal cues that can help to emphasise key points. By being aware of these things, presenters can ensure that their financial reports are communicated effectively. 

Here are some tips for making oral communication more effective:

1. Make sure you are clear and concise.
2. Use simple language that everyone can understand.
3. Avoid using jargon or acronyms that people may not know.
4. Speak slowly and clearly, and enunciate your words properly.
5. Pause occasionally to give people a chance to respond or ask questions.
6. Be aware of your tone of voice, and make sure it is appropriate for the situation.
7. Pay attention to body language and adjust your behaviour accordingly.

Identify and address reporting issues

When it comes to financial reporting, all entities want to ensure that their reports are accurate and complete. However, there are times when organisations may encounter reporting issues. These can include everything from incorrect amounts being reported to incorrect disclosures.

It's important for organisations to be able to identify potential reporting issues early on so that they can be corrected before the report is made public. This requires a careful review of all information included in the financial statements. Organisations should also have procedures for dealing with potential reporting issues, including how to correct them and who will be responsible for doing so.

Identify issues by asking for feedback before publishing the final version. Modifications, like changes to the format or corrections to the calculations, must be made to ensure accuracy and readability.

Reporting issues can have a significant impact on an organisation's bottom line, and it's therefore critical that they are identified and corrected as soon as possible. By taking steps to identify and analyse financial reporting issues, organisations can help ensure that their reports are accurate and compliant with accounting standards.