Annual closing of accounts

Annual closing of accounts

In general, even if you manage without using subscription accounting services, you will need assistance for your company annual closure of accounts. A professional will deal more quickly and accurately with the task and will help you see the development of your business during the last year, what changes and improvements you need to make and how to optimize your costs.

What is the purpose of the annual closing of accounts

• To form and clarify the financial indicators of your business during the respective year.
• To establish the final financial results as well as the overall property status and financial position of the company as of December 31 of the respective year.

The last stage of the annual closure of accounts includes the preparation of annual financial statements (AFS), fairly presented in accordance with the applicable financial framework (IFRS, NFRSSME).

 

Stages of annual closure of accounts:

• Analysis of accounts

Key to this stage is the procedure of definition of the period, i.e. inclusion of all purchases and sales during the reporting period as well as of only such purchases and sales done during the reporting period.

The procedure includes:

• Review of purchases / sales during the last months of the current reporting period;
• Review of purchases / sales during the first months of the next reporting period;
• Regular costs (e.g. rental costs, monthly subscriptions, etc.) are accrued in accordance with contracts, and a monthly analytical review can ensure their completeness.

Inventory of assets and liabilities

Subject to inventory:

• assets such as fixed assets, inventories, receivables from counterparties, cash;
• liabilities such as obligations to corporate and loan commitments.

Conducting an inventory of the assets and liabilities of the reporting enterprise is a very important procedure. This confirms that the assets and liabilities recorded in the books really exist on the reporting date.

Closure of accounts

The closure of each account is mostly an analysis of the contained therein information (opening balance and turnover on debit and credit), on the basis of which the trial balance is prepared (trial balance prior to the annual closure).

Reporting income taxes

The initial value for taxation of income of a company is the accounting profit on the basis of which the taxable profit is formed. The amount of taxable income must be equal to the one specified in the annual tax return declaration.

Preparation and submission of annual financial statements of the company

The annual financial statements (AFS) is drawn up by the chief accountant (or an official appointed to another economic position in the company) or by an accounting firm registered under the Commerce Act.
AFS is signed by the head of the company and by the person who draws it up, is responsible for drawing or managing/represents the accounting firm drawing the report. Then it is sealed with the company stamp.
Besides full accounting services, Komarov Consult offers to you only annual accounting service. Entrust the important tasks to experienced professionals.