Financial statements you’re preparing, unless you’re planning to close down the business and are liquidating, should be prepared on a going concern basis. If the situation is that you’re not able to continue trading and are going into bankruptcy, the requirement is moot of course, however normally it’s expected that a company is able to continue doing business.  Continue reading →

Financial statements whenever shown for a company must present its financial position, financial performance and cash flows fairly. But what fair really means?  Continue reading →

Related parties and transactions with them, if you have those, are to be disclosed in a separate note.  Continue reading →

Borrowings, if your company has them, are to be disclosed in groups by their nature – bank loans, finance leases etc. The obvious reason is to give the readers an overview of the types of borrowings the company has. One single line saying “borrowings” doesn’t really say it all, does it?  Continue reading →

Usually the first bit of text to write up when preparing an Annual Report is the management report, which let’s face it, is up to your creativity. Just make sure the important bits about the reporting period are covered, keep in mind that it should be understandable and consistent (not giving contradictive information when it comes to the rest of the Annual Report) and you should be fine. We’ve in our experience seen real work of arts in a form of a picture and very short and blunt texts. Fit somewhere between those and you’ll meet the goal of a management report.  Continue reading →

The statements you’re making your entries into are called balance sheet and income statement. These are the ones that are the most important and the mostly used – for government officials, investors etc. Importance of those two statements is something we’ll cover in more detail further below, but let it be said that there are two or even three other statements one can present for a company – statement of cash flows, statement of comprehensive income and statement of changes in owner’s equity. Those are the statements that mostly just form from the main two and are not separate statements you make entries into. These statements come into play when you’re preparing your company’s annual report and you’ve got to present all sorts of detailed information about your company’s results and performance. However let us move now to those two main statements. Continue reading →

Other reserves, if part of your equity, are something you should have a separate note about. I would say that even if the balance is insignificant, it is part of your equity and that in it is important enough to be disclosed in more detail. Continue reading →