Financial accounting

Financial accounting is a branch of accounting concerned with the summary, analysis and reporting of financial transactions related to a business. This involves the preparation of financial statements available for public use. Stockholders, suppliers, banks, employees, government agencies, business owners, and other stakeholders are examples of people interested in receiving such information for decision making purposes. Financial accountancy is governed by both local and international accounting standards. Generally Accepted Accounting Principles (GAAP) is the standard framework of guidelines for financial accounting used in any given jurisdiction. It includes the standards, conventions and rules that accountants follow in recording and summarizing and in the preparation of financial statements. On the other hand, International Financial Reporting Standards (IFRS) is a set of accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board (IASB). With IFRS becoming more widespread on the international scene, consistency in financial reporting has become more prevalent between global organizations. While financial accounting is used to prepare accounting information for people outside the organization or not involved in the day-to-day running of the company, managerial accounting provides accounting information to help managers make decisions to manage the business. Financial accounting and financial reporting are often used as synonyms.

According to International Financial Reporting Standards: the objective of financial reporting is: To provide financial information that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the reporting entity.
According to the European Accounting Association: Capital maintenance is a competing objective of financial reporting.

According to International Financial Reporting Standards: the objective of financial reporting is: To provide financial information that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the reporting entity.
According to the European Accounting Association: Capital maintenance is a competing objective of financial reporting.

Asset life, leverage, and debt maturity matching

Equity ownership and identification with the founding team

Equity ownership and identification with the founding team

Asset life, leverage, and debt maturity matching