Do I need to fill in the third column of the balance sheet?
The third column may only be used if the presentation of information has changed on the balance sheet. If you would like to enter the indicators and comparative data of the accounting period which have not changed in comparison with the previous report on the balance sheet, you can select “Accounting periods” in general data, click on the link “Change periods” and delete the period preceding the previous period. Then you will see only two periods – the period of the financial year and that of the previous report. What is described above is not mandatory: you can also fill in a report where there are three columns, filling in the first two columns and leaving the third empty.
How do I reflect corrected data on the balance sheet?
The guidelines of the Accounting Standards Board 1 section 52 show that changes made to information presentation format must be corrected retrospectively in order to bring them into compliance with the new presentation format, except if it is not possible to assess in a reliable way the effect of the new presentation format on the previous periods. If changes are made to the presentation format of the information to be reflected on the balance sheet the company must present, in addition to the final balance of the previous period, the opening balance sheet according to the new presentation format.
Example: 31.12.2010 is in this case the opening balance sheet of the previous period, and upon correction you need to present data as of this data. Thus, upon correction you need to present the data as of 31.12.2012 (or data of this financial year), 31.12.2011 (already corrected final balance of the previous financial year) and 31.12.2010 (corrected opening balance sheet of the previous financial year).
Why are the “Related parties” and “Labour expense” notes mandatory?
The “Related parties” and “Labour expense” notes are mandatory pursuant to Annex 3 (8) of the Accounting Act so as to disclose to the members of the management board and the highest supervisory body the remuneration, significant benefits (calculated on an accrual basis) and contingent liabilities of the accounting entity, as well as the total amount of remuneration paid to employees and the average number of employees during the financial year. Previously, this information had to be disclosed in the management report, but pursuant to the latest amendment to the Accounting Act, the corresponding information must be disclosed in the notes.
Which indicators do I need to write in the note of “Related parties”?
In the “Related parties” note you need to disclose to the members of the management board and the highest supervisory body the remuneration, significant benefits (calculated on an accrual basis) and contingent liabilities of the accounting entity.
In addition you need to disclose the rows already mentioned but taking into account additional claims set out in the guidelines of the Accounting Standards Board. For example, the information about the parties to be disclosed is specified in the guidelines of Accounting Standards Board 2 sections 45-49.
In the case of apartment associations it may happen that all of the balance and income statement constitutes transactions related to the parties. In this case you can find the corresponding information in the “Related parties” note.
In the case of non-profit organisations and foundations, similar requirements as those for the financial statement of a company apply. In addition, non-profit organisations must disclose in the “Related parties” note many natural persons and legal entities they have as members (Accounting Act Annex 3 clause 8).
Who is meant as members as natural persons and legal entities in the “Related parties” note in the case of non-profit organisations?
Apartment associations
Pursuant to Apartment Associations Act section § 5, members of the apartment association are all owners of apartment ownerships of one or several immovables divided into apartment ownerships if the decision to form an apartment association has been made pursuant to the procedure established by this act. If the apartment ownership belongs to several owners, one of the owners is taken to be a member of the apartment association according to the written agreement between them.
Thus the number of members of apartment associations is not the number of inhabitants in the building but the number of apartment owners. Generally, this number equals the number of apartments in the building.
Attention should also be paid to the fact that some natural persons or legal entities may own several or more apartments in the same building. In the latter case, the member of the apartment association has more than one vote, but he or she is still regarded as just one member. In the event that 10 apartments in the building belong to a real estate agency and 5 to different natural persons, the number of members of the apartment association is 6 in total.
Regular non-profit organisations
Pursuant to Non-Profit Organisations Act section 12, every natural person or legal entity complying with the requirements of the articles of association of a non-profit organisation may be a member of the non-profit organisation. A non-profit organisation shall comprise at least two members unless the law or articles of association prescribe a greater number of members. The management board shall organise the registration of members of a non-profit organisation, and having the correct data is not only related to writing the correct number in the annual report, but also to calling a general meeting and being clear how many members have the right to vote when carrying out the meeting.
A separate count is kept of members who are legal entities and those who are natural persons, and at a minimum, each member’s name and acceptance as a member should be written on the list.
Sometimes no clear difference is made between those who are members of a non-profit organisation and have the right to vote at a general meeting and those who are actual clients – this issue often comes up in the case of cultural collectives or sports organisations when, for example, the people participating in a choir, dance act or group are all members of the non-profit organisation, but not always, and they are just offered a service.
Natural persons cannot bequeath or transfer their regular membership in a non-profit organisation; legal entities retain their membership in the case of transformation but not in the case of a merger or division.
As a rule, organising the registration of members of the non-profit organisation is an internal administrative matter and the state needs to be notified of the names of the members only in the case of political parties, but pursuant to the Non-Profit Organisations Act the registrar has the right at any time to demand information from the management board on the number of members of the non-profit organisation.
Which indicators need to be written in the “Labour expense” note?
The “Labour expense” noteincludes the total amount of remuneration calculated and the average number of employees during the financial year.
“Labour expense” also includes the remuneration paid to the members of the management board and other labour costs that occur in connection with their work.
The previously mentioned rows must be disclosed in the notes, but taking into account the additional requirements that are set out in the guidelines of the Accounting Standards Board.
Why do I need to submit a proposal for profit distribution/covering of loss?
The submission requirement in the case of the proposal for profit distribution/covering of loss is provided by Accounting Act section 14. The requirement to submit the decision about profit distribution/covering of loss arises Commercial Code sections 971 and 335.
Which form do I choose for the proposal/decision of profit distribution/covering of loss?
The proposal and decision are always of the same type i.e. in one report it is not correct to use a proposal to distribute profits and decision to cover loss.
In different situations you can observe the following principles (see table).
|
Situation |
Form |
|
Company has undistributed profit, profit during the accounting period |
proposal/decision of profit distribution |
|
Company has undistributed loss, the loss gathered from the previous period shall not be distributed |
proposal/decision of covering loss |
|
Company has undistributed profit, loss during the accounting period, company decides to pay out dividends from the undistributed profit of previous periods |
Both can be used, depending on which deal is more important – big loss, fewer dividends – proposal/decision about covering loss; small loss, lots of dividends – proposal/decision of profit distribution |
|
Company has accumulated loss of previous periods, loss during accounting period |
proposal/decision of covering loss |
|
Company has accumulated loss of previous periods, profit during accounting period |
Pursuant to Commercial Code section 276 either proposal/decision for covering loss or proposal/decision of profit distribution |
How do I fill in the form for profit distribution/covering loss and/or decision?
The rule that both rows need to include the same number applies when filling in the form. For example, the undistributed profit of the company is 200, the profit of the accounting year is 100, the first Total is thus 300. The company decides to increase the reserve by 30 units and pay out dividends of 150. Thus, the undistributed profit after distribution is 120 (300-30-150). The corresponding sum must be reflected on the row “Profit undistributed during previous periods after profit distribution”. Total row again 300 (30+150+120).
|
|
31.12.2015 |
|
Retained earnings |
|
|
Annual period profit (loss) |
100 |
|
Total |
300 |
|
|
|
|
Distribution |
|
|
Other reserves increase (decrease) |
30 |
|
Dividends |
150 |
|
Retained earinings after distribution (covering) |
120 |
|
Total |
300 |