How to prepare a financial statement?
The financial report is the most important report of an enterprise.They are prepared at the end of each financial year of the enterprise or in another - provided for by the law - in order to close the books of accounts. Obligation to prepare annual financial statements in entities using the so-called full accounting is imposed by the Accounting Act.
This document has a strictly defined form. First of all, it should be performed in a reliable and comparable manner so that its addressee can read all the necessary information efficiently.
Financial report - introduction
The introduction to the financial statements, in accordance with Annex 1 to the Accounting Act, must include in particular:
- the name and seat of the company, the core business of the unit and an indication of the competent court or other authority keeping the register,
- an indication of the duration of the entity's activity, if it is limited,
- indication of the period covered by the financial statements,
- indication that the financial statement contains aggregate data, if the unit includes internal organizational units that prepare separate financial statements,
- indication of whether the financial statements have been prepared on the assumption that the entity will continue as going concerns in the foreseeable future and whether there are any circumstances indicating a threat to the continuation of its activities,
- in the case of financial statements prepared for the period during which the merger took place, an indication that it is a financial statement prepared after the merger of companies and an indication of the method of accounting for the merger (acquisition, merger of interests),
- discussion of the adopted accounting principles (policy), including the methods of valuation of assets and liabilities (including depreciation), measurement of the financial result and the method of preparing the financial statements to the extent to which the act allows the entity to choose.
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Valuation of assets on a balance sheet basis
Another very important issue in creating a report is the correct valuation of all assets. For this purpose, it is necessary to conduct and settle an inventory in the company in advance. It is also important that properly valued assets and liabilities are included in the appropriate headings of the report.
The annual balance sheet should include:
- Assets, i.e .:
- intangible assets belonging to the company
- tangible fixed assets (fixed assets - including construction)
Long-term receivables, i.e. assets controlled by the entity with a reliably determined value, arising from past events, which will result in future economic benefits for the entity - deposits (e.g. for rent or lease), receivables from the sale of financial assets (e.g. bonds ) and fixed assets, receivables due to awarded damages.
- Long-term investments, i.e .:
- financial assets,
- real estate and intangible assets that are not used by the entity.
- Accruals, i.e .:
- deferred tax assets,
- costs of ongoing works, preparation of new production, planned overhaul of machines, organization and establishment of the company
- Inventories, i.e .:
- materials purchased for own use,
- finished products (goods and services) manufactured or processed by the entity, fit for sale or under production,
- semi-finished products and goods purchased unprocessed,
- advance payments for goods.
- Short-term receivables, i.e .:
- loans granted by the entity (classified as short-term investments),
- advances paid by the entity for future deliveries of intangible assets (classified as intangible assets),
- advances paid by the entity for future deliveries of fixed assets (classified as property, plant and equipment,
- advances paid by the entity for future supplies and services (classified as inventories).
- Liabilities, i.e .:
- due contributions to share capital
- own shares
- other capitals
- profit or loss
- deductions from profit during the entire tax year
The balance sheet should also include a cash flow statement and a pledge of changes in equity. This document should be drawn up in Polish and in the Polish currency, and the figures may be rounded to the nearest thousand zlotys, if it does not distort the image of the entity.
Profit and Loss Account
The profit and loss account consists in comparing the company's revenue streams from the sale of goods, services and financial operations with the costs of this activity. It shows the company's ability to generate profits and self-financing.
Economic review of the company
Apart from the formal issues included in the introduction to the financial statements and balance sheet, this document must also contain a clear overview of the development of the entity's operations and its economic situation. It should also indicate important events that have occurred in the company since the previous end of the financial year and present the future development of the entity.
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Approval of the annual financial statements
Pursuant to Art. 52 points 2 of the Accounting Act, the annual financial statements are signed by the person entrusted with keeping the books of accounts and by the head of the entity to which the report relates. The Accounting Act also requires, in addition to handwritten signatures, the date of their submission on each element of the financial statements.
Approval of the annual financial statements should take place up to six months from the balance sheet date. Then, within 10 days of its approval, the signed report should be delivered to the tax office. The next step is to submit an annual report to the district court to complete the data in the National Court Register. This must be done no later than 15 days after the approval of the report. At the same time, it should also be announced in the Monitor Polski.