Introduction Financial statements are the tools through which the performance of the company is being evaluated
Financial statements are the tools through which the performance of the company is being evaluated. In the financial reporting of the company, financial securities have very crucial role as the transactions carry monetary value that impacts the overall presentation of financial performance in financial reports. There are mainly three different classes of securities, Equity securities, Debt securities and Derivative securities. The detailed descriptions of the securities and their impact on the content of financial reports like as Balance sheet, cash flow statement and Income statement are here under:
Equitable Securities and its effect on the content of financial reports
Equitable securities are the ownership of the company and these are issued by any company, either for the expansion purpose or to retire the medium or long-term debts. The financial statements have different impacts of the kind of transaction of the security, as surplus is recorded in the equity portion of the balance sheet that shows thecompany has much high owning as compared to liabilities.