All companies must end each financial year with a financial statement. At a specific time, a summary of the accounts of a company shall be made and an annual report drawn up consisting of income statement, balance sheet and other notes or disclosures.
Financial statements can also be done monthly or quarterly.
Corporate forms such as public limited companies and economic associations must always prepare an annual report. Other types of companies may prepare annual accounts or annual accounts.
Preparations for the financial statements
The ongoing accounting must be completed before the financial statements can be prepared. All business events are booked until the last day of the financial year.
In the cash method, outstanding invoices are recorded as receivables from the customer and the invoice method is done the same with the invoices.
In connection with the turn of the year, be sure that the company’s income and expenses are reported correctly in relation to the last day of the financial year and that all goods sent and services rendered are invoiced. It is important that those who deliver goods and services to you invoice well in advance.
In the financial statements, lists of the assets in the company and liabilities and depreciation must also be kept in inventory to provide the right basis for the financial statements.
Check balance accounts
The balance accounts are checked so that the balance on the accounts has the right value. The depreciation that is made for assets such as machinery and equipment must be recorded in the financial year. Depreciation takes place over a number of years. Changes in value of other kinds, such as impairment losses on assets, must also be recorded in the financial year. These are posted on the balance sheet date.