BACKGROUND

Financial statements are places or sources of information relating to

financial position and company performance. The financial data is analyzed so that
information is obtained that supports the decision.From this information, company
will find out what decisions that will make and how to achieve the goals. Financial
statements must describe all data relevant procedures and procedures so that they
can compared so that the accuracy of the analysis can be justified.

The financial statements are records of the company's financial information

in different periods. These financial statements are part of the financial reporting
process.Financial reports have very important role in the company.The financial
report provides information about how the company conditions. Financial
statements consist of income statement, statement of changes in equity, balance
sheet, statement of cash flows and notes of financial statements. All of the reports
have different characteristics and goals, but they still have one goal that is provide
information. Not only has a characteristic difference, the financial statements have
a relationship between one report and another.

As we know, currently there are conventional financial reports and sharia

financial reports. Conventional financial statements are basically both presenting
financial statements that aim to determine the financial condition of a financial
institution. It's just that conventional financial statements only emphasize worldly
aspects. Islamic financial institutions according to the National Sharia Council
(DSN) are financial institutions that issue sharia financial products and those that
receive operational permits as sharia financial institutions. Of course the report has
a difference. What are the differences we will discuss in this paper.

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 DISCUSSION

Financial statements are the result of the accounting process and are
historical information. Accounting is the process of identifying, measuring and
reporting economic information to form considerations and make informed
decisions for the users of that information (M.Sadeli, 2002:2). The purpose of
financial statements according to IAI (2009:3) is to provide financial information
regarding the financial position, performance, and changes in the financial position
of a company that is beneficial to a large number of users in making economic
decisions.Financial reports must have qualitative characteristics that can be
understandability, relevance, reliable and comparability.

The ability of information to be understood by its users is called

understandability. FASbanologizes information as a tool or tool. The tool will be
useful for the user if the tool is indeed a suitable or appropriate tool and the user is
willing to learn about the ability and how it works.Information capability to assist
users in differentiating several decision alternatives so that users can easily make
choices is a form of relevance.Reliability is the ability of information to give
confidence that the information is true or valid. Last, in comparability there is
information capability to help users identify similarities and differences between
two sets of economic phenomena (for example two sets of financial statements that
presuppose the activities of two businesses).

In making financial statements, a framework is needed to become a

foundation. Financial accounting standards are the result of the formulation of the
Indonesian Accounting Principles Committee in 1994 replacing the Indonesian
Accounting Principles in 1984. In Indonesia itself, SAK is an application of several
existing accounting standards, such as International Accounting Standard (IAS),
International Financial Reporting Standards (IFRS) , Entity Without Public
Accountability (ETAP), and PSAK.

1.1Financial Statements (Conventional)

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 The income statement is a report to measure the operational success of a
company for a certain period of time. Usually users of this report to determine the
profitability and value of investment. This report presents information to assist
users or companies in predicting the amount of cash flows in the future.

Balance sheet or often called statement of financial position shows the

balance of assets, liabilities and equity at the end of the period of time. Balance
sheet is essentially a long version the basic equation of accounting, which is the
assets equals to liabilities plus shareholders’ equity.

Statement of changes in equity is a reconciliation of the beginning and

ending balances in a company’s equity during a reporting period. The statements
start with the beginning equity balance, and then adds or subtracts such items as
profits and dividend payments to arrive at the ending balance.

Statement of cash flow is one of the financial statements that show the
movement of entity’s cash during the period. It helps users on the movement of
cash in the entity. There are three section in this statement, cash flow from
operation, cash flow from investing, and cash flow from financing activities.

Notes are an additional information and explanation that are related to the
unexplained information that could not be communicated through the amounts
shown on the financial statements. Generally, the notes are the main method for
complying with the full disclosure principle and are often referred to footnote
disclosures.

1.2 Sharia Financial Statements

The sharia financial statements are a financial report that complies with
Islamic teachings, such as the Sharia law, Koran, and the Sunnah. The sharia
financial statements can be differentiated into 2 part, the first part is that the
financial statements are according to the PSAK while the second part is according
to AAOIFI.

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 According to ED PSAK 101 (2014 Revision), The Financial statements are
presented by the entity that carries out sharia transactions at its base. Terminology
in this PSAK can be used by profit-oriented entities, while for entities that are not
profit-oriented or have for different equity, it is necessary to adjust the description
in some financial posts. The components of sharia entity financial statements
consist of:

1. Statement of financial position

2. Statement of profit or loss and other comprehensive income
3. Statement of changes in equity
4. Statement of cash flows
5. Statement of reconciliation of income and revenue sharing
6. Statement of sources and distribution of zakat funds
7. Statement of sources and uses of qardhulhasan
8. Notes

The statement of reconciliation of income and revenue sharing was made

with the aim of reconciliation between the income of Islamic banks that use an
accrual basis and opinions that are shared with fund owners who use the cash basis.
In this report can also be presented the main income sources of Islamic banks so
that it can also be known the main income cash flows of Islamic banks.
The statement of sources and distribution of zakat funds is a report that is
showing the source and distribution of fundszakat to the zakat management entity
for a period of certain time, and the balance of zakat funds that have not been
distributedon a certain date.
The Statement of sources and uses of qardhulhasan is a report that shows
the sources of the qardhulhasan such as from Infaq, Sadaqo, Wakaf, fine, return of
productive qardulhasan, and non-halal revenue. It also shows the usage of
qardhulhasan, such as productive qardhulhasan, donation, and other usage for
public interest.

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 In AAOIFI, the Islamic thinkers use the approach on the sharia financial
statement by taking the whole thought of contemporary accounting that were
applied and then test it and analyze whether or not the assessment is parallel with
Islamic sharia law. The components of sharia financial statements based on
AAOIFI consist of:
1. Statement of financial position
2. Statement of profit or loss
3. Statement of changes in equity or Statement of Changes in retained earning
4. Statement of cash flow
5. Statement of changes in limited investment and its equivalency
6. Statement of sources and usage of Zakat fund and donation fund
7. Statement of sources and usage of qardhulhasan

2.The relationships between Financial Statements

2.1Income Statement and Balance Sheet

The balance sheet reports a company’s assets, liabilities, and owner’s equity
as of the last instant of an accounting year. Generally, the amount of the owner’s
equity will have changed from the previous balance sheet amount due to the
company’s net income, the owner’s additional investments in the business, and the
owner’s withdrawal of business assets. If the owner did not invest or withdraw, the
change in owner’s equity is likely to be the amount of net income earned by the
business. The revenues, expenses, gains, and losses that make up the net income are
reported on the company's income statement.The connection between the balance
sheet and the income statement results from the use of double-entry accounting or
bookkeeping and the accounting equation Assets = Liabilities + Owner's Equity.

2.2Income Statement and Statement of Changes in Equity

The relation between income statement and statement of changes in equity

could be known because of the increase of decrease of net assets from the profit and
loss as reported in the income statement. More relation can be described by using

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Total Debt to Equity ratio that shows the fund that are provisioned by the
shareholders to the lenders.

2.3Income Statement and Statement of Cash Flow

The relation between income statement and statement of cash flow appears
under the operating activities section of the cash flow statement., which uses
information found on the income statement. Accounts such as net income and
depreciation expense are presented on the income statement for the same period.
The company deducts net income with the depreciation expense and changes in
certain accounts found on the balance sheet to ascertain the net cash amount from
operating activities.

2.4Balance Sheet and Statement of Changes in Equity

The relation between balance sheet and statement of changes in equity

appears under the report in the balance sheet that consist of the increase or decrease
of net assets as a result of the net gains or losses recognized outside the income
statement and directly in the statement of changes in equity, the increase in net
assets and equity arising from the issue of share capital, the decrease in net assets
and equity arising from the payment of dividends.

2.5Balance Sheet and Statement of Cash Flow

A balance sheet is a summary of the financial balances of a company, while

a cash flow statement shows how the changes in the balance sheet accounts and
income on the income statement statements affect a company’s cash position. The
information in the cash flow statement explains changes shown in the numbers
reported on the balance sheet such as long-term loans and working capital changes.

2.6Statement of Changes in Equity and Statement of Cash Flow

The statement of cash flow tells on how much money a company has to
cover its obligation and whether or not the cash on hand has increased or decreased.
An increase or decrease in shareholder’s equity indicates new capital is flowing into

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or out of the company. The financing activities of statement of cash flow reflect the
inflow and outflow of capital and liabilities, while the funding activities reflect the
usage of end-term capital and short-term debt obligations.

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 CONCLUSION

Financial statement as the result of accounting process and historical

information. They should have four component of qualitative characteristics such
as understandability, relevance, reliable and comparability. Financial statement
consists of income statement, statement of changes in equity, balance sheet,
statement of cash flows and notes of financial statements. They also have relations
each-others. One account can affect other accounts in financial statements. The
example, Relationships between reports can also appear when increase or decrease
net assets. Not only the relationship between financial statements with one another.
Financial statements also have differences such as conventional financial
statements and Islamic financial statements. In general, we know that financial
statements consist of 5 types, but in sharia financial statements consist of 8 types of
financial statements.

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REFERENCES

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relationships.html. Accesed on October 25, 2018 at 19.30 hours

Surwardjono, (2017). BukuTeoriAkuntansiPerekayasaanPelaporanKeuangan.

Nurhayati, Sri, dan Wasilah.2016. Akuntansi Syariah di Indonesia. Jakarta:

SalembaEmpat.