Fjárhagsviðum

Fjárhagsviðum is an Icelandic term that translates to "financial statements" or "financial accounts." It encompasses the formal records that summarize a company's or organization's financial transactions and position over a specific period. These statements are crucial for understanding the financial health and performance of an entity.

The primary financial statements typically include the balance sheet, income statement, and cash flow statement. The balance sheet provides a snapshot of assets, liabilities, and equity at a particular point in time. The income statement, also known as the profit and loss statement, reports revenues, expenses, and the resulting net income or loss over a period. The cash flow statement tracks the movement of cash in and out of the business from operating, investing, and financing activities.

Fjárhagsviðum are prepared according to accounting standards, such as International Financial Reporting Standards (IFRS) or generally accepted accounting principles (GAAP), depending on the jurisdiction. These standards ensure consistency and comparability of financial information.

The preparation and analysis of fjárhagsviðum are essential for various stakeholders. Investors use them to assess the profitability and risk of potential investments. Creditors rely on them to determine a company's ability to repay loans. Management uses them for internal decision-making, performance evaluation, and strategic planning. Tax authorities also require financial statements for assessing tax liabilities. In Iceland, like in many other countries, these statements are a fundamental requirement for businesses and often need to be filed with regulatory bodies.