Fractal markets hypothesis and Primary financial statements: Difference between pages

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(FMH).
''Financial reporting.''


The fractal markets hypothesis is an evolving model of investor and market behaviour which identifies repeating patterns in market prices and conditions.
Under International Accounting Standards (IAS) 'primary' financial statements are the main accounting statements that must be presented.  


The FMH may explain why extreme negative (and positive) outturns are observed more frequently in real financial markets than predicted by simpler efficient market models.


These are:


Under the FMH, a key contributory factor is the difference in investment time horizons between different classes of market participants.
* Statement of financial position (balance sheet).
* Income statement (profit or loss account), which can be included in the statement of comprehensive income.
* Statement of comprehensive income.
* Statement of changes in equity.
* Statement of cash flows.




If the FMH is borne out in practice, then real financial markets are significantly less stable than predicted and described by more traditional market models.
The primary financial statements are supported by Notes to the accounts, providing additional and more detailed financial information.




==See also==
* [[Entity]]
* [[Financial reporting]]
* [[Income statement]]
* [[International Accounting Standards]]
* [[Notes]]
* [[Statement of cash flows]]
* [[Statement of changes in equity]]
* [[Statement of comprehensive income]]
* [[Statement of financial position]]
* [[Statement of profit or loss and other comprehensive income]]


== See also ==
[[Category:Accounting,_tax_and_regulation]]
 
[[Category:Compliance_and_audit]]
*  [[Efficient market hypothesis]]
*  [[Behavioural economics]]
 
*  [http://www.bankofengland.co.uk/publications/Pages/fsr/fs_paper23.aspx Bank of England Financial Stability Paper No 23]
 
[[Category:Capital_Markets_and_Funding]]
[[Category:Risk_Management]]

Revision as of 15:57, 5 May 2019

Financial reporting.

Under International Accounting Standards (IAS) 'primary' financial statements are the main accounting statements that must be presented.


These are:

  • Statement of financial position (balance sheet).
  • Income statement (profit or loss account), which can be included in the statement of comprehensive income.
  • Statement of comprehensive income.
  • Statement of changes in equity.
  • Statement of cash flows.


The primary financial statements are supported by Notes to the accounts, providing additional and more detailed financial information.


See also

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