Annual closing

What it means

The annual closing gives a complete picture of the company’s performance and assets as at the last day of the accounting period. It comprises the balance sheet, the profit and loss statement and the notes, which explain how the figures arose.

An ordinary closing is prepared at the period end. An extraordinary one arises on a change of legal form or on entering liquidation or bankruptcy; an interim one in cases the law specifies.

Prepared statements and approved statements are not the same. The statutory body prepares them once the books are closed, while only the general meeting approves them. An unapproved version can be filed in the register, with the approval and the decision on the result added later.

How it works in practice

Closing work comes first: stocktaking, accruals and deferrals, estimated accruals, provisions, impairment allowances, currency translation and depreciation. Only then do the statements mean anything.

The accounts are approved within six months of the period end and filed in the register of financial statements. Companies above the statutory thresholds attach the auditor’s report from the audit.

We file the statements electronically together with the tax return through the Financial Administration portal, which passes them on to the register. When the general meeting sits only after filing, we later submit the notice of approval and the decision on profit distribution or on settling the loss.

What to watch out for

The closing is not an appendix to the tax return: they are two separate obligations with their own deadlines and penalties. And the notes are no formality - they explain precisely the items an inspection or a bank asks about first.

Statements in the register are public and read by anyone considering business with the company. Obviously wrong or incomplete statements put off suppliers and banks and damage the creditworthiness score in databases that pull figures from the register automatically.