The financial statement is a report developed and published by management to show the company's performance and financials to creditors, banks, partners and investors. It is one of the basic tasks of the entire financial accounting. From this report, investors and creditors can learn all about the company's profitability and fortunes, and become acquainted with other relevant information that may indicate the company's ability to invest or borrow.

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.

Prepare annual financial statements
The preparation of financial statements can be both a simple and a complicated task. It all depends on the size of your business and the number of monthly transactions. There are degrees that require footnote information. On the other hand, there are financial statements that are presented without footnotes.

The explanations can have different purposes. For example, your bank will usually be content to see some basic financial numbers to ensure your business is in a position to pay off debt. The financial statements or report are typically prepared by translating account audit balances into a set of templates appropriate to a particular country's accounting laws.

Specific requirements for annual financial statements in different jurisdictions
Today, most financial statements are prepared 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 the vast majority of countries (particularly EU member states) the financial year ends on December 31st. Other jurisdictions may have different approaches as the financial year may end in different periods depending on the company's registration date, e.g. B. (in Singapore, UK, Hong Kong and others);
Deadlines for submitting annual reports. Depending on the jurisdiction, the timeframe for filing the annual report can vary from a few months to a year: 3 months in Bulgaria and Singapore; 4 months in Latvia, up to 12 months in Cyprus or up to 8 months in the UK;
requirements for the exam. Note that some countries require each company to submit an audited report (Cyprus, Singapore, Hong Kong, Ireland). In other countries, companies can produce an audited report voluntarily or if they meet certain criteria (read more about audit).