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The features of financial statement are mentioned below:
1. The Financial Statements should be relevant for the purpose for which they are prepared. Unnecessary and confusing disclosures should be avoided and all those that are relevant and material should be reported to the public.
2. They should convey full and accurate information about the performance, position, progress and prospects of an enterprise. It is also important that those who prepare and present the financial statements should not allow their personal prejudices to distort the facts.
3. They should be easily comparable with previous statements or with those of similar concerns or industry. Comparability increases the utility of financial statements.
4. They should be prepared in a classified form so that a better and meaningful analysis could be made.
5. The financial statements should be prepared and presented at the right time. Undue delay in their preparation would reduce the significance and utility of these statements.
6. The financial statements must have general acceptability and understanding. This can be achieved only by applying certain “generally accepted accounting principles” in their preparation.
7. The financial statements should not be affected by inconsistencies arising out of personal judgment and procedural choices exercised by the accountant.
8. Financial Statements should comply with the legal requirements if any, as regards form, contents, and disclosures and methods. In India, companies are required to present their financial statements according to the Companies Act, 1956.
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