The order of preparation of financial statements: instructions, terms

This article describes in detail the key points of reporting by the accounting department, components, forms, types of reporting, clarifies the legal side of the issue of preparing financial statements.

The role of accounting and financial reporting in the theory of economics

Accounting statements are a set of generalized data, indicators and indicators that illustrate the results of the financial and economic aspects of the company for a period (month, year, quarter).

In the process of drawing up the accounting reporting procedure, the established rules and recommendations are very important, which appeared to the extent of expanding production processes and enterprise capacities and intensifying interactions with other contractors and economic entities.

The key role of financial reporting and accounting reports is that it is a clear source of necessary information for company managers.

In the preparation of financial statements, the legal regulation is expanded in detail provided in the first part of the fourteenth article of the Federal Law No. 402-ФЗ. This legal act states that annual reporting involves the formation of a balance from the accounting department, a financial report on performance, as well as supporting additions and annexes to them.

Frequency in the reporting process of the accounting department

The frequency in the process of generating accounting reports plays a very important role, because it is up-to-date and up-to-date data and indicators of financial results that have significant value for the organization.

In the annual financial statements, the procedure for preparation and presentation in strict order must comply with the law, namely, the thirteenth article of the Federal Law (No. 402-ФЗ), which entered into the legal field of activity since December 2011.

Legislatively established and the fact that the institution has the right to compile interval reports of a financial nature. Interim financial reports are generated by the business entity in cases where it is mandatory ordered to do so. Such a need may arise on a legal basis or in accordance with the constituent documents. Such reporting covers a period of less than a calendar year.

Categories of entities providing financial statements

The instruction on the procedure for preparing financial statements and on its composition for small businesses may to some extent differ from the reporting requirements in large organizations. Therefore, the composition of the annual reporting depends on the category of the entity engaged in business or other activities. There are three types of subjects:

Individual entrepreneurs. This may also include business units, branches and other organizational and structural units that operate legally, adhere to tax laws. Such entities have the right not to prepare financial statements; there will be no requirements from external structures.
Representatives of small business, as well as non-profit institutions, organizational associations having the status of research, commercial projects on a temporary or permanent basis.The procedure for preparing and presenting financial statements for representatives of this category is regulated by Article 13 of Federal Law No. 402-ФЗ, which entered into force on December 2011.
Other institutions, the financial statements of which are subject to clarification and mandatory audit. These can be housing cooperatives, state and budgetary institutions, legal organizations, law firms, chambers, bar associations, credit organizations, non-profit organizations that carry out the functions of foreign agents in the country.

Compound Accounting Statements

The generalized procedure for preparing financial statements is regulated by law and should be presented as follows:

1. The balance sheet.

2. Report on financial performance:

information on the direction and use of allocated funds (for non-profit organizations);
report on changes in capital structure;
cash flow statement;
applications that clarify other information about the capital, direction of movement of funds and the financial condition of the company as a whole.

A simplified balance sheet for other categories of economic entities is described below.

Accounting Forms

The financial statements inform about the results of the financial and economic activities of the organization, and also in the process of analyzing income and expenses gives an impetus to further planning, productive activities and stabilization of market positions.

The order of preparation of the financial statements of the organization may be in a free form, that is, management has the right to independently develop reporting forms. At the same time, some requirements are mandatory:

reliability;
completeness of information.

If the company decided to use this right, then it is obliged to adhere to special rules and norms when filling out data on financial transactions.

The procedure for compiling accounting reporting forms involves the preparation of form 1, illustrating various line codes of all groups and sections, as well as form 2 (profit and loss statements), where the financial performance of the enterprise for a certain period should be.

Stages of formation of financial statements

The process of generating financial statements has the following stages:

Identity control of information from primary documents and information from accounting accounts.
Cash and property inventory.
Making the necessary changes in accounting when identifying any deviations.
The reformation of the balance, consisting in the annual write-off of profits of the enterprise.
The process of preparing an accounting report.

The order and terms of preparation of financial statements

To achieve the organization's stable position in the market, it is very important to adhere to the rules and standards of financial statements.

The order of preparation of the financial statements of the organization is formed on the basis of certain rules, which are described in detail below.

The principles of reporting include:

Compliance with the absolute accuracy of the information provided.
Compliance with relevance in the preparation of financial statements.
The reflected information must necessarily take into account the analysis of the activities of units, departments, representative offices and branches.
The preparation of financial statements must take into account the values of each indicator. In the case of an insignificant numerical characteristic of a certain indicator, a dash is indicated in the filling cell, and detailed information on this indicator is placed in the explanations.
The date intended for the report is December 31 (the last day of the period for which the financial statements are reflected).
The reporting period begins on January 1 and ends on December 31. For established organizations and individual entrepreneurs, this period starts from the date of entering information into the Unified State Register of Legal Entities or the Unified State Register of Legal Entities, and if the entry of data into the register dates from the date and month after September 30, the period starts from the date of entry into the register and ends on December 31 of the following current year;
Providing the form of filling with all the necessary details: period, form of ownership, name of the chief accountant and director, full name of the compiler.
The content and the procedure for the preparation of financial statements must comply with all the above rules, everything must also be written in Russian and using exclusively national currency.
The prepared statements must be signed by the head (or the acting head).

The procedure for the preparation and presentation of financial statements begins with the balance sheet. The process of preparing an accounting report has its own rules. The balance sheet is a wide body of economic information on the activities of the enterprise. It outlines the operating activities of the organization for a specific period, and also provides an opportunity to compare and contrast the financial and economic indicators of the current period with similar indicators of the base period.

Who may be interested in the balance sheet?

Persons interested in the procedure for the preparation and presentation of financial statements have the right to familiarize themselves with the balance sheet of the enterprise. These persons include:

owners of the enterprise;
representatives of state statistical authorities;
banks providing loans to organizations;
investors
sponsor organizations;
partners, counterparties with whom close cooperation has been established;
representatives of the administration of the city, region, country;
tax inspectors;
financial and economic employees of the organization.

Compliance with the rules and regulations for the preparation of the balance sheet

The balance sheet is of various types, applied to different situations. To draw up a regular balance sheet for the internal needs of the enterprise, there are such recommendations and rules:

Data is recorded taking into account the status of indicators for a specific date (balance) or for working periods (negotiable);
information should display accounting or inventory data;
quantitative indicators are displayed taking into account margins, depreciation, reserve items;
the balance can be drawn up both in full and in abbreviated form;
the balance sheet may be reflected in the form of a correspondence between the amount of assets and the amount of liabilities and capital or in the form of a correspondence between capital and the difference between assets and liabilities;
the balance can be drawn up both for one enterprise, and for several adjacent to it - branches, divisions (consolidated, consolidated balances);
Also, the balance may be intermediate, preliminary, final or forecast;
depending on the composition of the financial statements and the preparation procedure, the balance sheet may be unifying, liquidating, opening, dividing.

Compliance with the rules governing the statement of financial performance

When it is drawn up, the following rules must be observed:

It is necessary to separate the income derived from the direct activities of the organization, from income not related to direct activity.
Revenue should be shown net of taxes, excise taxes and VAT.
Cost should be reflected in the correct way, while management and commercial costs are not taken into account.
The structural components of net profit are highlighted.
Proper preparation of notes and explanatory notes regarding the financial statement and balance sheet.

Adhere to the following recommendations:

notes and explanations should be drawn up in accordance with the accounting policy;
also there must be attested to the fact that the procedure for accounting and preparation of financial statements is carried out in accordance with applicable legal standards;
information should be deciphered clearly and extensively, referring to all areas of activity and operations of the company (for example, on accounts payable, receivables, movement of assets, current and fixed assets);
explanations should include informative data on cash flows and capital;
there should also be information about the leading field of activity of the enterprise, the average number of workers, structural and organizational units of the company.

A simplified version of the preparation of financial statements of representatives

The instruction on the preparation of financial statements also involves a simplified version of design and use. The procedure for preparing the financial statements of an organization that is a representative of a small business or public in its activity may have a simplified form. It is in accordance with applicable law that enterprises belonging to small businesses can draw up a simplified version of the balance sheet and report on financial results.

This balance option includes:

assets and liabilities;
data for the last three years;
general indicators;

The report on financial results in a simplified form should have the following indicators:

revenue
expenses related to direct activities (interest payable and other income);
other expenses;
income tax;
net profit.

To classify the organization as a small business, such rules must be in force.

25% of the authorized capital should belong to public, religious or state groups.
The total share of non-residents in the authorized capital cannot exceed 49%; exception - scientific and educational organizations.
The number of employees for the previous calendar year may not exceed the figure of 100 people.
Income from the sale of goods or services may not exceed the figure of 800 million rubles without VAT for the same previous calendar year.

Before you start preparing financial statements, you need to properly perform some set of preparatory actions. As a result, they will perform an auxiliary function in the reporting process.

These actions are as follows:

the relevant department should conduct a comprehensive inventory;
the compliance of the current accounting policy with the current legislation, the fixing in certain cases of certain changes in the policy must be checked;
checking the correctness of registration of all financial transactions and their holistic and correct display in accounting;
implementation of the process of reformation of the balance.

If in the process of inventory discrepancies between actual property indicators and recorded similar data in the reporting are revealed, then the relevant articles should be displayed in this order:

Property that was not included in the statements is valued at the average market value at the date of the inventory activities, then it is recorded in the statements.
Lack of property or its mechanical damage within the established norms of loss should be directly attributed to the costs or expenses of the enterprise, and beyond the norm - at the expense of the perpetrators of the incident at current market value.

In the following year, profit distribution is based on decisions of the relevant competent authorities. This process involves receiving dividends, deductions to the reserve funds of the company, covering losses of previous periods.

The procedure for reporting budgetary institutions

The financial statements of a budgetary institution, which operates mainly at the expense of the state or local budget, is very detailed and detailed.

Quarterly reporting consists of a report on the receipt and disposal of the funds of the foundation of the institution, on the receipt and use of additional funds for the fund, a report on debts for various programs and budget funds.

The annual reporting consists of a report on the movement of fixed assets, a report on the use of material resources and food, a report on the results of financial activities.

A set of measures preliminarily carried out before preparing financial statements

External users of financial statements

The procedure for preparing financial statements may be of interest to external users, which can be combined into two groups:

persons directly interested in the financial statements;
persons with indirect interest in the financial statements and activities of the organization.

For example, shareholders seek to study informative data and its dynamics in detail. This is information about profitability, changes in the composition of the organization’s capital.

Lenders are also very seriously interested in the financial performance of the company, its level of solvency and the prospects for further financial stability.

Investors are interested in the further benefits of investing, which can be illustrated in the financial statements, as well as audit information.

Business partners may have a direct interest in financial reporting in order to seek alternative or additional opportunities for cooperation.

The second group of external users with indirect interest, as a rule, protects the interests of representatives of the first group. They are state oversight bodies, audit companies, consulting firms, information advertising agencies, stock exchanges.

Legal responsibility for falsification of accounting data

Misrepresentation of accounting data, violations of the rules of conduct may be fraught with penalties and administrative liability. The penalty depends on the rudeness and severity of the accountants' oversights. Such oversights include understating taxes, registering a non-existent object of financial activity, deviations from the accounting register data. Administrative liability is regulated by the Code of Administrative Violations of the Russian Federation. Information on this subject is updated annually. The size of the fine is established by the judge, taking into account the nature of the violation.