The annual financial statement of a company provides an overall view of all profits and losses of the past business year. The instrument of managerial accounting thus provides information about the financial status of a company.
What belongs to the annual financial statement
For smaller enterprises, unless they are subject to the obligation to keep accounts, a Income Surplus Statement (EÃœR) is sufficient as an annual financial statement.
If, for example, the company belongs to the scale of corporations, it is necessary to have at least one balance sheet and a Profit and Loss Account to create. These include:
- Partnerships (GbR, OHG, KG)
- Corporations (AG, GmbH, UG)
- Corporation & Co. (AG & Co. KG, GmbH & Co. KG, UG & Co. KG )
Depending on the type and size, an appendix and a management report may still be necessary.
Function of the annual financial statements
An annual financial statement is intended to inform on the one hand and to provide the basis for payments on the other. The latter can include taxes, but also shareholdings and dividends. Strategies and consequences for the future can be derived from the information contained in the financial statements.
The duty to conclude
The basic obligation to prepare annual financial statements, as far as Germany is concerned, is regulated in the Commercial Code. Other laws also apply. These include the Disclosure Act and the Income Tax Act. There are also different regulations that affect certain legal forms and regulations.
International requirements
Companies that international companies that are active in the USA must meet possible other and/or additional requirements in addition to the German annual financial statements. For example, companies that are also active in the USA and may be listed on the stock exchange must prepare financial statements according to US-GAAP ( United States Generally Accepted Accounting Principles ) present.
If group structures exist, annual financial statements are prepared in accordance with IFRS (International Financial Reporting Standards) necessary.
How do I prepare my annual accounts?
Before preparing the annual financial statement, one has to prepare a number of things:
Necessary documents
Contractual documents such as excerpts from the commercial register, shareholder, leasing, rental and lease agreements, loan agreements and insurance policies, etc. are important.
Also documents such as copies of invoices, receipts (donations?) etc.
inventory
In the inventory the inventory is determined. This is all the debts and assets of the company.
Complete accounting
In accordance with the principle of "no posting without supporting documents", all postings and corresponding supporting documents must be available. This also includes depreciation in order to show the depreciation of assets.
Open receivables
Receivables that are still open are evaluated with regard to the risk of bad debt and posted as individual value adjustments.
Reserves
Reserves (statutory and voluntary) must be set aside.
This is how an annual financial statement is composed
The current accounting of a company provides the basis for the annual financial statement. This is Art summary of the accounting on an annual basis including the inventory.