An annual report is a comprehensive

report A report is a document that presents information in an organized format for a specific audience and purpose. Although summaries of reports may be delivered orally, complete reports are almost always in the form of written documents. Usage In ...

on a company's activities throughout the preceding

year A year or annus is the orbital period of a planetary body, for example, the Earth, moving in its orbit around the Sun. Due to the Earth's axial tilt, the course of a year sees the passing of the seasons, marked by change in weather, the hou ...

. Annual reports are intended to give

shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...

s and other interested people information about the company's activities and financial performance. They may be considered as

grey literature Grey literature (or gray literature) is materials and research produced by organizations outside of the traditional commercial or academic publishing and distribution channels. Common grey literature publication types include reports ( annual, r ...

. Most jurisdictions require companies to prepare and disclose annual reports, and many require the annual report to be filed at the company's registry. Companies listed on a stock exchange are also required to report at more frequent intervals (depending upon the rules of the stock exchange involved).

Content

Typical annual reports may include: * General corporate information * Operating and financial review * Director's Report *

Corporate governance Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions ...

information *

Chairperson The chairperson, also chairman, chairwoman or chair, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the grou ...

s statement *

Auditor's report An auditor's report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditor as a result of an internal or external audit, as an assurance service in order for the user to make decisions ...

* Sustainability and ESG information * Contents: non-

audit An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing ...

ed information *

Financial statement Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

s, including **

Balance sheet In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a Partnersh ...

also known as Statement of Financial Position **

Income statement An income statement or profit and loss accountProfessional English in Use - Finance, Cambridge University Press, p. 10 (also referred to as a ''profit and loss statement'' (P&L), ''statement of profit or loss'', ''revenue statement'', ''stateme ...

also known as profit and loss statement. **

Statement of changes in equity A statement of changes in equity and similarly the statement of changes in owner's equity for a sole trader, statement of changes in partners' equity for a partnership, statement of changes in shareholders' equity for a company or statement of cha ...

Cash flow statement In financial accounting, a cash flow statement, also known as ''statement of cash flows'', is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to oper ...

Notes to the financial statements Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

Accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...

policies * Independent assurance statements * Other features Other information deemed relevant to stakeholders may be included, such as a report on operations for manufacturing firms or

corporate social responsibility Corporate social responsibility (CSR) is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethicall ...

reports for companies with environmentally or socially sensitive operations. In the case of larger companies, it is usually a sleek, colorful, high-gloss publication. Research has found that annual reports that convey optimistic tone are associated with lower audit fees, suggesting that annual report tone reflects factors that auditors consider in assessing audit risk. The details provided in the report are of use to investors to understand the company's financial position and future direction. The financial statements are usually compiled in compliance with

IFRS International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's fina ...

and/or the domestic

GAAP Gaap (also ''Tap'', ''Coap'', ''Taob'', ''Goap'') is a demon that is described in demonological grimoires such as ''the Lesser Key of Solomon'', Johann Weyer's ''Pseudomonarchia Daemonum'', and the Munich Manual of Demonic Magic, as well as Jac ...

, as well as domestic legislation (e.g. the

SOX Sox most often refers to: * Boston Red Sox, an MLB team * Chicago White Sox, an MLB team * An alternate spelling of socks Sox may also refer to: Places * SOX, Sogamoso Airport's IATA airport code, an airport in Colombia Computing and technolo ...

in the U.S.). In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

, a more-detailed version of the report, called a

Form 10-K A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission (SEC), that gives a comprehensive summary of a company's financial performance. Although similarly named, the annual report on Form 10-K is distinct from the of ...

, is submitted to the

U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

. A publicly held company may also issue a much more limited version of an annual report, which is known as a "wrap report." A wrap report is a Form 10-K with an annual report cover wrapped around it.

Directors' Role

Statement of Directors' responsibilities for the shareholders' financial statements The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable

Law of the Republic of Ireland The law of Ireland consists of constitutional, statute, and common law. The highest law in the State is the Constitution of Ireland, from which all other law derives its authority. The Republic has a common-law legal system with a written cons ...

, including the accounting standards issued by the Accounting Standards Board and published by The Institute of Chartered Accountants. Irish company law requires the directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the Directors are required to: * select suitable accounting policies and then apply them consistently * make judgements and estimates that are reasonable and prudent * prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business The directors confirm that they have complied with the above requirements in preparing the financial statements. The directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and with Irish statute comprising the Companies Acts 1963 to 2009...

History

In 1903,

US Steel United States Steel Corporation, more commonly known as U.S. Steel, is an American integrated steel producer headquartered in Pittsburgh, Pennsylvania, with production operations primarily in the United States of America and in several countries ...

published an annual report whose financial accuracy was certified by Price, Waterhouse & Co in what is known as the earliest modern corporate annual report.

'Alternative' annual reports

Certain groups such as The True Cost Of Chevron Network have released 'alternative' annual reports as a way to highlight ongoing

environmental destruction Environmental degradation is the deterioration of the environment through depletion of resources such as quality of air, water and soil; the destruction of ecosystems; habitat destruction; the extinction of wildlife; and pollution. It is defined ...

and/or

human rights abuses Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for certain standards of hum ...

committed by a particular company.The True Cost Of Chevron, An Alternative Annual Report, May 2011 http://truecostofchevron.com/2011-alternative-annual-report.pdf Retrieved 19 July 2017

References

External links

How to Efficiently Read an Annual Report
*
How to Read a 10-K Like Warren Buffett
by

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