Year-End Statement

Understanding the Term: Year-End Statement

The term Year-End Statement, when used within the context of trading, is a comprehensive report generated by a brokerage or investment firm for their clients. This report is usually distributed at the end of each fiscal year, hence the name.

What is a Year-End Statement?

In essence, a Year-End Statement is a detailed record of all transactions a trader has undertaken in a given fiscal year. It incorporates buy and sell transactions, dividends, interest earned, fees paid and everything else that affects a trader's account.

Relevance of a Year-End Statement

One of the major uses of a Year-End Statement is tax preparation. It contains key details needed to determine capital gains and losses. Moreover, it provides auditable proof of transactions, which can be crucial in disputes about trading activity.

Components of a Year-End Statement

A typical Year-End Statement breaks down trading activity in a comprehensive manner. Each statement provides the opening and the closing balance of trading accounts, total trades executed, gains or losses incurred, fees paid, and details of dividends and interests earned.

How to Use a Year-End Statement

Novice traders often find Year-End Statements daunting because of their complex structure. However, it is important to parse these statements to identify profitable and loss-making trades. Moreover, any discrepancies in the statement can indicate inaccuracies in the transactions registered by the brokerage or investment firm.