Accounting

The basic purpose of periodic reporting is to follow up with all daily, weekly, monthly, quarterly, half yearly and yearly business activities in a summarized form in order to judge the clear position of the firm and on the basis of that the management of the firm is able to draw a valid conclusion. Periodic reports comprises in any form like financial statements, production report, sales report and other routine MIS reporting, etc. The periodic reporting has its own importance for any industry or organization and no one can denies its significance .It is the real essence of any company and it brings an added advantage for the firm in a decision making process. The role of Periodic reporting is very pivotal because it helps the top management to evaluate and assess the actual performance of the departments. It also helps the management to review its objective of the firm and set the necessary adjustments in the eye light of that objective (Weygandt, Kieso,  Kimmel, 2002).

For instance, ABC Company projects its annual target sales of 1 billion but at the end of the period the sales report tells the different story that annual sales is just about 90 million and there is a shortfall of 10 million. So, in this case there are some clues for the top and middle management like given proper training to sales staff, distribution channel, consumer behavior, improper selling strategy, etc. Due to periodic reporting, the management is able to find out all the clues and reasons behind this shortfall of 10 million. 

In a different perspective, financial reporting has own importance for different stakeholders like shareholders, debt holders, banks, companys management and employees. Financial reporting helped top management to evaluate the financial performance of the firm like current assets, fixed assets, expenses, liabilities, owners equity position, etc (Weygandt, Kieso,  Kimmel, 2002). For example, XYZ company planned to take loan for their future project so in order to do this company evaluates its own performance liabilities position via periodic financial reporting and draw a conclusion that it is feasible to take a loan or not. Moreover, all this evaluation comes from periodic reporting. 

    The meaning of Time period principle is to provide the financial data on monthly, quarterly, yearly or equal length of periods. This information helps the companys management in the preparation of Financial Statements (Meigs, 1999). The length of the time period depends on different circumstances. For example, a magazine publisher may feel that its natural business period ends on January 31 and so chooses that date as its year end.