March is the last month to prepare for the close of the previous financial year. In particular, the entities’ attention is focused on the preparation of financial statements and activity reports on the time. Below are the three most important things to do before March 31st.
1. Preparation of financial statements
The financial statement is prepared as at the balance sheet date, i.e. the last day of the tax (fiscal) year. For most companies this is 31 December. The financial statement consists of:
- Balance Sheet;
- Profit and loss account;
- Additional information, including an introduction to the financial statements and additional information and explanations.
The balance sheet is a statement of the company’s assets and liabilities as of the end of the current and previous fiscal years. The profit and loss account informs in separate items about revenues, costs, profits and losses and obligatory charges to the financial result for the current and previous financial year. Additional information is a description of the general accounting policy adopted in the company (in principle). Micro entities are not obliged to prepare additional information. However, they are then obliged to attach supplementary information to the balance sheet regarding their financial liabilities, advances and loans granted to members of the administrative, management and supervisory bodies, and their own shares.
The Accounting Act requires keeping accounting books and preparing financial statements in Polish and in the Polish zloty. This obligation entails the need to convert transactions and balance sheet items expressed in foreign currencies into Polish zlotys. The numerical data contained in the financial statements may be rounded to the nearest thousand zlotys if this does not prevent the presentation of all information relevant to making economic decisions.
The financial statement should be prepared in the appropriate format in accordance with the published structures, otherwise it will not be accepted by the National Court Register system intended for reporting financial documents.
2. Preparation of an management activity report
Capital companies, limited joint-stock partnerships, mutual insurance companies, mutual reinsurance companies, cooperatives, and state-owned enterprises are also obliged to prepare a report on the entity’s activities. One of the exceptions to the lack of the requirement to prepare an activity report is a micro entity (it must then meet other requirements).
The report on the entity’s activities is not an integral element of the financial statements. The Accounting Act does not regulate the principles of preparing this report, but only specifies the minimum scope of information that should be included in the activity report. The activity report is a specific assessment of the entity’s activities from the perspective of the management board and information about the strategy and intentions planned by the management board.
3. Signing the financial statement and management activity report
The financial statements and the management activity report are signed by the management board in its current composition as at the date of their preparation.
The financial statements are prepared in electronic form and signed with a qualified electronic signature, a trusted signature or a personal signature.
The activity report, without having an imposed document format, can be prepared as a text file saved in PDF format and marked with a qualified electronic signature, trusted signature or personal signature.
To avoid surprises in terms of technical problems when preparing and uploading financial documents to the file repository (which may happen), it is reasonable to check the signatures of the financial report and test upload it.
Once the board of directors has signed the financial statements and the management report (if prepared), annual meetings should be scheduled to approve the financial documents. For most companies, this step should be completed by the end of June.
SKLAW cooperates with clients and their accounting and bookkeeping offices and auditors to support the comprehensive approval of financial documents for entities subject to such obligation.