Financial statements are the formal reports summarising a business's financial position and performance, primarily the balance sheet, income statement and cash flow statement.
The three core statements answer three questions: the balance sheet shows what you own and owe on a date, the income statement shows whether you made a profit over a period, and the cash flow statement shows how cash actually moved. Together they give lenders, owners and the CRA a complete financial picture.
In Canada, private companies prepare statements under ASPE or IFRS. The level of accountant involvement, a compilation (Notice to Reader), a review engagement, or an audit, depends on who relies on them. Every T2 return requires at least the underlying statements through the GIFI schedule.
When applying for a business loan, the bank asks for two years of financial statements. It reads the balance sheet for solvency, the income statement for profitability, and the cash flow statement to judge whether the business can service the loan.
Our certified accounting firm handles this for businesses and individuals across Canada, at fixed fees with no surprises.
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