So much information is lost by using this format that it does not present much of an opportunity for financial analysis. Further, the limited presentation of information makes it easier for someone committing fraud to hide the financial impact of his or her actions. Hence, investors make certain assumptions to forecast the earnings of the company for investment purposes although it’s difficult in making such assumptions. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology.

• Consolidated financial statements combination the financial position of a father or mother company and its subsidiaries.
• The numbers of operating expenses like selling expenses, administrative expenses, etc. would be presented under Operating expenses.
• Alongside a set of reports, it displays the present” “inter”m” time period and relative” “inter”m” previouperiod’s’s financial data (even without being a whole long statement).
• An interim financial report is a complete or condensed set of financial statements for a period shorter than a financial year.
• Nevertheless, except for substituting comprehensive financial statements, condensed financial statements turn out to be the additional documents or authentic supplementary papers essential during the auditing procedure.

Its detailed purchases and changes in inventory will be presented as one amount with the description Cost of Goods Sold. Perhaps thousands of operating expenses will be presented as one amount with the description Selling, General and Administrative, or SG&A. Interim periods typically possess financial accounts with a comprehensive or condensed form of financial statements dated less than a fiscal year. So while reviewing, the full statements will comprise releases and line items that might have been exempted from the condensed form of the financial statement. To cross-check the condensed version, a full set of financial statements can be very helpful.

Condensed Financial Statements

Condensed financial statements are the brief version of a business’s income statement, cash flow statement, and balance sheet, and all collectively put into a particular financial document. Condensed financial statements are a highly aggregated version of the financial statements, where most of the line items are summarized into just a few lines. This approach is used to simplify the presentation of information, sometimes into a single page for all three of the financial statements. The footnotes that usually accompany a complete set of financial statements may not be presented when a condensed format is used.

The auditor should also consider the effect that any modification of the report on the complete financial statements might have on the report on the condensed financial statements or selected financial data. However, no reference to the inconsistency is necessary if a change in accounting referred to in the auditor’s the top 5 high yield bond funds for 2020 report on the complete financial statements does not affect the comparability of the information being presented. The condensed financial statements must adhere to Generally Accepted Accounting Principles (GAAP) and may at times be provided to interested parties in lieu of full financial statements.

What Are Condensed Financial Statements?

He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years.

How to Report Product Sales Revenue & Service Revenue on an Income Statement

The auditing team conducting an audit of the company will usually view condensed financial statements along with full financial statements for a full picture of the company’s financial standing. We have reviewed the condensed consolidated balance sheet of ABC Company and subsidiaries as of March 31, 19X1, and the related condensed consolidated statements of income and cash flows for the three-month periods ended March 31, 19X1 and 19X0. A regular set of condensed financial statements would generally include a statement of comprehensive income, changes in equity, cash flows, financial position, and particular descriptive notes. A condensed income statement is a summarized version of a company’s full income statement, presenting the essential financial information in a simplified format. The primary purpose of a condensed income statement is to provide a quick and easy-to-understand overview of a company’s financial performance over a specific period, usually a quarter or a year.

Example of a Condensed Income Statement

These condensed financial statements for XYZ Corporation provide a simplified overview of the company’s financial position and performance for the six-month period ended June 30, 2023. The condensed balance sheet, income statement, and statement of cash flows contain only the essential line items, allowing stakeholders to quickly grasp the company’s overall financial health. However, for a more in-depth analysis, a full set of financial statements with detailed line items and accompanying notes would be required. Consolidated financial statements combination the financial position of a father or mother company and its subsidiaries.

The auditor should report on such condensed financial information in the same manner as he reports on other supplementary schedules. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. In the consolidated report, the transactions amongst subsidiaries or a subsidiary and a father or mother company are eliminated to avoid double counting. For instance, if a parent company purchases goods or companies from a subsidiary, the father or mother firm’s buy and the subsidiary’s sale are both eliminated so this transaction doesn’t distort the ultimate figures.

How to Determine a Company’s Total Revenue

Nevertheless, except for substituting comprehensive financial statements, condensed financial statements turn out to be the additional documents or authentic supplementary papers essential during the auditing procedure. When examining a condensed set of financials, you should be extra critical when looking at each line item. The lack of detail may make the analysis simpler, but that same lack of detail can mask large fundamental problems within the firm. It may be a good idea to receive a full set of financial statements to review as well, as the full statements will contain disclosures and line items that may have been eliminated from the condensed version. A condensed income statement is typically issued to external parties, who are less interested in the precise sources of a company’s revenues or what expenses it incurs, and more concerned with its overall performance. Thus, bankers and investors may be interested in receiving a condensed income statement, while a company manager would likely want to see more detail.

Condensed Income Statement

Overall, the condensed financial statement outlines the financial reporting using the least possible content. Condensed financial statements are an exceedingly accumulated form of financial statements, with various line items being concise into just a few lines. Using this method, the demonstration of financial data can be simplified, often consolidating all three financial statements into a single page. For example, the condensed financial statement offers only one line for the” “total revenues”,” while the full financial account will have the revenue by products, services, operating divisions, interest, and various other sources of revenue. The most important part of the condensed statement of comprehensive income is the income statement.