Annual financial statement
Annual financial statement is a report that is developed and published by company's management to show company's performance and financial data to the creditors, banks, partners and investors. It is one of the basic tasks of financial bookkeeping as a whole. Seeing this report, investors and creditors can learn everything about company's profitability and assets as well as get acquainted with other relevant information that may indicate company's capability of making investments or taking loans.
Complexity level of annual financial statement
Preparation of financial statement can be straightforward and easy, but at the same time it can be quite challenging for many inexperienced accountants. The complexity level of preparing the financial statement mostly depends on:
For Trading Companies:
- Number of transactions throughout the fiscal period;
- Number of suppliers and clients of the company;
- Complexity and volume of the accounting documents supporting transactions (i.e., agreements, incoming and outgoing invoices, transportation documents, CMRs, export declarations, etc.);
- Number of employees;
- Volume of fixed assets, loans, interests, taxes and other factors.
For Holding Companies:
- Number of subsidiary companies;
- Volume of dividends distributed from the subsidiary companies;
- Number of employees;
- Volume of fixed assets, loans, interests, taxes and other factors.
Confidus Solutions team of qualified bookkeepers and lawyers will consult you regarding complexity level of your accounting. We can prepare financial statements for your company as well as any other accounting document - check F.A.Q. section or ask us now!
Preparing annual financial statement
Drafting annual financial statements can be both an easy and a complicated task. It all depends on the size of your business and the number of monthly transactions. There are financial statements, which do require footnote disclosures. On the other hand, there are financial statements, which are presented without any footnotes.
There may be different purposes for the statements. For example, normally your bank will be satisfied to see some basic financial figures in order to make sure your company is able to settle debts. Financial statement or report is usually prepared by transferring account trial balances to a set of templates, appropriate for accounting laws of specific country.
Specific requirements for annual financial statements in different jurisdictions
Today the majority of year-end financial statements are made in full accordance with generally accepted accounting principles (GAAP). However, you should always consider the specific requirements for the chosen jurisdiction. For example:
- The fiscal year. In vast majority of countries (especially EU member states), the financial year ends on December 31st. Other jurisdictions may have different approaches, since the financial year may end in different periods, depending on the registration date of the company, e.g., (in Singapore, the United Kingdom, Hong-Kong and others);
- Timeframes to file the annual reports. Depending on the jurisdiction, the timeframe for submission of the annual report may vary from just few months up to a year: 3 months in Bulgaria and in Singapore; 4 months in Latvia, up to 12 months on Cyprus, or up to 8 months in the UK;
- Requirements for audit. Note that in some countries every company must submit audited report (Cyprus, Singapore, Hong-Kong, Ireland). While in other countries companies may prepare an audited report voluntarily or, if they reach certain criteria (read further about Audit).
We highly recommend checking up local national legislation prior to drafting or submitting annual report, as in different jurisdictions requirements may slightly vary. You can also ask our bookkeepers for detailed information - click here to know more.
Confidus Solutions
Confidus Solutions will help you evaluate all possible options and choose the most efficient unique solution to achieve your personal goals! We have many years of expertise in this industry and experienced lawyers and bookkeepers, who can take care of your company's bookkeeping in any jurisdiction worldwide! If you require more information - check our offered solutions or contact us to get a unique offer!