ABRIDGED ACCOUNTS Meaning and
Definition
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Abridged accounts refer to a condensed version of a company's financial statements, providing a summary overview of the business's financial position and performance within a specific accounting period. Typically, abridged accounts are created for small- or medium-sized enterprises (SMEs) that meet certain criteria set by local legislation.
These accounts aim to offer relevant financial information in a more concise format, reducing the complexity and detail found in full sets of financial statements. While they may follow the same accounting principles and standards as full accounts, abridged accounts contain fewer disclosures, notes, and explanatory information.
The purpose of abridged accounts is to enable SMEs to deliver financial information quickly and efficiently, minimizing administrative burdens and costs. They are usually used for statutory reporting requirements, such as filing with government agencies or taxation authorities, allowing businesses to fulfill their legal obligations in a simplified manner.
Abridged accounts typically include summarized balance sheets, income statements, and cash flow statements. However, they omit some details that are commonly found in full accounts, such as breakdowns of individual subsidiaries or comprehensive notes to the financial statements. These streamlined accounts still provide key financial data, allowing stakeholders, such as shareholders, potential investors, or lenders, to make informed decisions regarding the company's financial health and prospects.
Overall, abridged accounts strike a balance between providing essential financial information and reducing the reporting burden for SMEs, contributing to increased efficiency and ease of compliance with statutory requirements.
Etymology of ABRIDGED ACCOUNTS
The term "abridged accounts" in the financial context refers to a summarized or condensed version of a company's financial statements. The etymology of this term is derived from the word "abridge", which means to shorten or condense. The word "abridge" originated from Old French "abregier" or Latin "abbreviare", both of which have the same meaning.
