Financial Education - Characteristics of the statement of financial position balance sheet and statement of financial position

As I have already reiterated, financial reporting standards allow the indistinct use of three names for this financial statement: Statement of Financial Position, Balance Sheet and Statement of Financial Position, which are used interchangeably in this work.

The Statement of Comprehensive Income or Profit and Loss is the financial document that shows the difference between the amount of income and expenses of an economic entity for a given period, which will be called profit or loss as appropriate and will serve for users of financial information to be able to evaluate potential changes in future economic resources.

It is also used to predict the entity's potential to generate cash flows and to estimate the efficiency and effectiveness with which these resources can be used and thus make the pertinent operating decisions to improve the profitability of the business. The profit or loss obtained modifies the economic entity's stockholders' equity in the Statement of Financial Position.

The Statement of Changes in Stockholders' Equity is the financial statement that reflects the modifications suffered by the elements of the stockholders' equity of an entity during a determined accounting period, derived from the decisions made by its owners in relation to their investment in said entity, which is the reason why it is possible to evaluate the behavior of the management in the achievement of its objectives.

It also presents the results of the aforementioned period as well as those of previous years and the movements made in these capital accounts. The Statement of Changes in Stockholders' Equity also evaluates the changes in stockholders' equity resulting from operations such as capitalizations, contributions, distributions and reimbursements that have occurred during the period covered by the financial statement.