Purpose and Users of Financial Statements
Financial-statement purpose, qualitative information and the needs of owners, lenders, tax authorities and other users.
How to study the ATT Qualification
Use Finance Act 2025 for the 2026 tax papers, complete the three foundational CBEs early, apply professional ethics throughout and concentrate option practice on the one paper you will enter.
Core concepts
Concept 1
Financial statements communicate financial position, performance and cash flows.
Exam cue: Identify the user and decision.
Concept 2
Different users need information for different economic and compliance decisions.
Exam cue: Select the statement and information relevant to that decision.
Concept 3
Useful information must be understood in context and remains subject to limitations.
Exam cue: State limitations or further information required.
Risk pitfalls and guardrails
Assuming all users need the same measure.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Treating accounts as a complete valuation of the business.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Ignoring accounting policy or period context.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Memory anchors
Position
The statement of financial position reports assets, liabilities and equity.
Performance
The income statement reports income and expenses for a period.
Cash flow
The cash-flow statement explains cash movements by activity.
User lens
Interpret information around the user's decision.
Limitation
Historic, estimated and policy-dependent figures require context.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
At 31 March, a reader wants one primary statement listing the entity's resources, obligations and owners' residual interest. Which statement meets that need?
The board wants a period summary showing revenue earned and expenses incurred before arriving at the year's result. Which statement should it read?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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