COMPANY FINANCIAL STATEMENTS
Financial statements show the owner the enterprise's assets, amount of liabilities, income, expenses and financial result for the reporting period. Law No. 996-XIV establishes the basic rules for accounting and reporting.
The director uses these figures for dividends, credit, investment and business management, while the accountant prepares the statements on the basis of the accounting records and primary documents.
Balance Sheet and Statement of Financial Results
The balance sheet shows assets, liabilities and equity at a specific date. The statement of financial results shows income, expenses and profit for the period. Under NP(S)BO 1, the full set also includes a cash-flow statement, statement of changes in equity and the relevant notes. Small enterprises use Forms No. 1-m and No. 2-m, while micro-enterprises use Forms No. 1-ms and No. 2-ms.
The owner compares profit with money in the account, receivables, inventory and loans. This shows whether earned profit has already turned into cash, how much money is tied up in goods and what share of the business is financed by borrowed funds. Significant revenue combined with large receivables shows the amount that is still with customers.
Dividend distribution is also linked to the financial result and corporate decisions. Before payment, the owners assess profit, tax consequences and the business's need for working capital. The accountant confirms the amount from the records and statements, while the director sees what share of profit should be retained for purchases, salaries and development.
A bank uses financial statements to assess turnover, capital, debt burden and the borrower's ability to service a loan. An investor assesses profitability, assets and liabilities. The director receives one set of indicators for negotiations with the bank, a partner and the owners.
Accounting, Reporting Periods and Forms
The reporting period for annual financial statements is the calendar year. Interim financial statements are prepared for the first quarter, first half-year and nine months in the cases established by law and accounting rules. The set of forms depends on the category of enterprise, type of activity and standards it applies.
Some enterprises prepare statements under national accounting standards, while categories defined by law use international standards. Corporate income-tax payers file financial statements together with the declaration in the cases provided for by the Tax Code. Separate requirements for the set, audit and deadlines apply to enterprises required to publish their statements.
The manager is responsible for organising accounting and creates conditions for timely preparation of business documents. The accountant maintains the records and prepares statements on the basis of primary documents. The enterprise category is determined according to the criteria of Law No. 996-XIV and affects the reporting set, forms used and certain publication rules.
For monthly management, the official forms can be supplemented with a short internal report on sales, cash, debts and inventory. Such a table gives the owner figures earlier than the annual reporting set and helps prepare the accounting data for the reporting date.
Statements for the Bank, Investor and Owner
Before credit negotiations, the director looks at profit, equity, debts, inventory turnover and receivables. Seasonality, investment or changes in settlement terms may explain particular indicators where the accounting data support this. In this way the statements work as evidence of the business economics.
For an investor, the owner can supplement the official statements with management detail by product, customer or business line. The official figures remain the basis, while the additional analysis explains where profit comes from and what resources are needed for growth. For a business sale or entry of a new partner, the statements help confirm profit, net assets, property and debts.
UBC can restore accounting records, prepare financial statements or prepare data for a bank, investor and owner. For initial work, the latest statements, trial balance, primary documents and a description of the purpose are sufficient. The client receives a clear set of figures on sales, assets, debts, cash and profit that can be used for financing and management decisions.
The owner can compare indicators over several years: revenue, gross and net profitability, capital, debts and cash flow. The trend shows whether sales growth improves the financial position or requires an increasing amount of borrowed funds. For an investor, this picture is often more important than one separate reporting year.
Need support or a specialist in your region?
UBC can offer an accountant or auditor in your region to review the financial statements. The owner agrees the purpose - filing statements, credit, an investor or restoration of accounting - and receives a suitable specialist.
Financial statements should answer the owner's questions about profit, cash, debts and the value of assets. UBC will help bring the accounting records and statements to a condition suitable for filing, the bank and negotiations with an investor. We will be pleased to answer additional questions. We wish you success in business!
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Frequently Asked Questions
What Do Financial Statements Show?
They contain information about the enterprise's financial position and results of operations; depending on the reporting set, they also show cash flows and changes in equity.
What Is the Main Reporting Period?
For annual financial statements, the main reporting period is the calendar year. The law also provides for interim reporting.
Who Is Responsible for Organising Accounting?
The manager organises accounting, while the accountant maintains the records and prepares statements on the basis of documents.
Can Statements Be Prepared for a Bank or Investor?
Yes. Official financial statements can be supplemented with breakdowns explaining profit, debts, assets and cash flow to a bank or investor.
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