Financial Statements
What are financial statements?
Financial statements, also known as annual accounts or statutory accounts, are prepared on an annual basis from the financial records of your company. Unlike management accounts, these are required by external bodies such as Companies House and HM Revenue and Customs. They are also used to assess how much tax a company will need to pay. They must be completed as part of your legal obligations as a company director.
Content
Financial statements are made up of the following, as set out in the Companies Act.
1. Balance Sheet
- Assets: Details of current and non-current assets.
- Liabilities: Information on current and long-term liabilities.
- Equity: Shareholders’ equity and retained earnings.
2. Profit and Loss Account
- Revenue: Income generated from business operations.
- Expenses: Costs incurred during the financial year.
- Profit or Loss: Net result after deducting expenses from revenue.
3. Notes to the Accounts
- Accounting Policies: Explanation of the accounting methods used.
- Additional Information: Details that provide context to the figures in the financial statements.
4. Directors’ Report
- Company Performance: Commentary on the financial performance and future outlook.
- Principal Activities: Description of the main activities of the company.
Submission deadlines
Timely submission of the financial statements is crucial to maintain compliance and avoid unnecessary penalties and interest. The financial statements must be filed at Companies House within 9 months of the year end. Please get in touch and see how we can help.
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