The objective of general purpose financial statements is to provide financial information about the reporting entity that is useful to current or potential investors and creditors in making decisions in their capacity as providers of capital. Furthermore, the budget objective is focused on meeting the information needs of the primary user group. The primary user group consists of those who have a right (or potentially could have a right) to an entity's assets: its current and potential equity investors, financiers and other creditors (capital providers). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay According to the IASB framework, the three main user groups of financial statements and their purpose of using financial statements as below: Investors/owners need financial information related to the business to evaluate the effectiveness with which managers manage it and to make judgments about likely levels of future risk and return. Shareholders need information to evaluate the entity's ability to pay them a return (dividend). The same goes for potential shareholders. Lenders (such as banks) need financial information about an entity to evaluate its ability to meet its obligations, pay interest and repay the amount borrowed. Suppliers and other trade creditors need information that allows them to determine whether amounts owed to them will be paid when due. Trade creditors are likely to be interested in an entity for a shorter period than financiers, unless they are dependent on the entity's continuation as a major customer. The primary user group is interested in financial information because the information is useful for making decisions that the primary user group entity can make as providers of capital. Decisions made by capital providers include whether and how to allocate their resources to a particular entity and how to protect or enhance their holdings. When making these decisions, capital providers are interested in evaluating an entity's ability to generate net cash inflows and management's responsible stewardship. Capital providers use information about an entity's resources, demands on those resources, and changes in resources and demands as inputs into the decision-making process. Although not mentioned in the IASB regulatory framework, other users such as employees, customers, governments and their agencies, and the public. Their information needs include the following: Employees and their representative groups are interested in information about the stability and profitability of their employers. They, too, need information that allows them to evaluate the entity's ability to provide compensation, retirement benefits and employment opportunities. Customers have an interest in having information about the continuation of an entity, especially when they have a long-term involvement with, or are dependent on, the entity. Governments and their agencies need information to regulate entities' activities, to assess whether they comply with agreed pricing policies, whether financial support is needed, and how much tax they should pay. They also require information to determine tax policies and as a basis for income and national statistics. Public. Entities influence members of the public in various ways. For example, entities can make a substantial contribution to the local economy in many ways, including the number of people they employ.