Finance Academy
                     
Elements of Financial Statements
Statement of Financial Accounting Concepts 
(SFAC) 6 , governed by Generally Accepted 
Accounting Principles (GAAP), encompasses 10 
elements of financial statements which mainly 
focus on measuring the performance and 
ascertaining the financial position of the business 
enterprise. It has embodied the accrual system of 
accounting in its elements that adhere to the 
financial statements.
Purposes of the elements of financial 
statements.
The elements of financial statements serve 
specific purposes that benefit in financial 
accounting. Understanding a company’s profit-
loss graph, statistical analysis, and economic 
status is very important to increase the gross 
output of the business. 
Benefits of writing financial statements.
The elements of financial statements like loss, liabilities, 
and gains make the statements a decision-making tool. 
These elements of financial statements make them an 
excellent decision-making tool. It also help in getting 
credits for the business. Financial statements are 
required for calculating federal tax dues. Thus, they are 
beneficial when it comes to filling out reports for tax 
obligations. Financial statements, therefore, help in 
making an enterprise better and organized. 
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