Financial statements are crucial documents that provide a snapshot of a company’s financial health and performance. In Poland, as in many other countries, businesses are required to prepare and disclose financial statements to comply with legal and regulatory requirements. In this article, we’ll explore the basics of financial statements in Poland, including their purpose, components, and regulatory framework.
What Is a Financial Statement?
A financial statement is a document containing basic information about the company’s annual activities, presented in financial terms. The date on which the financial statements are prepared is called the balance sheet date.
The financial statements should be prepared in Polish and in Polish currency.
What Should the Financial Report Consist Of?
- balance sheet – the balance of assets and liabilities is shown as at the end of the current and previous financial year
- profit and loss account – revenues, costs, profits and losses and mandatory charges to the financial result for the current and previous financial year are shown separately
- additional information – which includes, among others, a description of the adopted accounting principles (policy), including the adopted valuation methods and changes compared to the previous year.
The financial statements must be accompanied by:
- a resolution approving these documents
- activity report (if required – applies to, among others, capital companies, limited joint-stock partnerships)
- a resolution on the division of profit or coverage of loss
- auditor’s opinion/report (if the financial statements were audited)
Who Prepares the Financial Statements?
The following persons are obliged to prepare financial statements:
- companies that must keep accounting books in accordance with the Accounting Act, for example due to the amount of revenue or legal status
- companies that voluntarily chose accounting books kept in accordance with the Accounting Act.
Preparation of the annual financial report is the responsibility of the unit’s managers, i.e.:
- members of the management board of capital companies
- partners managing the company’s affairs in a general partnership, civil partnership and partnership
- general partners managing the company’s affairs in a limited partnership and a limited joint-stock partnership
- liquidators, trustees or administrators in bankruptcy proceedings
- members of management bodies of other entities (to which the provisions of the Accounting Act apply).
When to Prepare Financial Statements?
Companies registered in the National Court Register have 3 months to prepare financial statements from the balance sheet date. If the financial year coincides with the calendar year, the deadline for preparing the report is March 31.
Then, the report is approved by the relevant bodies in the company, e.g.: general meeting of shareholders, all partners. They are also approved by the owner of a sole proprietorship.
The annual financial report should be approved no later than 6 months from the balance sheet date, i.e. by June 30, if the financial year coincides with the calendar year.
If the company’s fiscal year coincides with the calendar year, the balance sheet date is December 31.
How to Prepare an E-financial Statement?
Financial statements can only be prepared in electronic form, in accordance with the structure and format detailed by the Ministry of Finance.
This requirement is effective from October 1, 2018.
From January 1, 2020, the obligation to create reports in a structured form also covers organizations not entered in the register of entrepreneurs of the National Court Register, which are CIT taxpayers, e.g. foundations, associations, trade unions.
How to Sign an E-financial Report?
The financial report in electronic form is signed by:
- unit manager and
- a person entrusted with keeping accounting books (e.g. chief accountant).
If the entity is managed by a multi-person body, the financial report may be signed by at least one person being a member of this body. However, before that, other persons who are members of this body must submit declarations that the financial statements meet the requirements provided for in the Act or refuse to submit such declarations.
Sanctions for Failure to Submit a Report
Failure to submit financial statements may result in, among others:
- fine imposed on the unit’s manager (e.g. member of the management board) from 10 to 720 daily rates
- penalty of restriction of liberty of the entity’s manager (e.g. member of the management board) from one month to 2 years
- coercive proceedings
- dissolution of the company and removal from the National Court Register
- appointing a curator.
Companies that do not submit a report are requested by the National Court Register to submit it within 7 days of receiving the notification under the threat of penalty or dissolution of the company (this is the so-called compulsory procedure).
Declaration of No Obligation to Submit an Annual Report
General partnerships or professional partnerships do not have to prepare financial statements if their revenues are less than the equivalent of EUR 2 million.
They then submit to the relevant National Court Register a declaration of no obligation to prepare and submit an annual financial report. They have 6 months to do so from the end of the financial year.
Companies in Poland are generally required to prepare their financial statements annually, following the end of the fiscal year. Publicly traded companies and certain other entities may also be subject to additional reporting requirements imposed by regulatory bodies such as the Polish Financial Supervision Authority (KNF).
Conclusion:
Financial reports require precision and compliance with regulations. Seeking professional advice from accountants or legal experts familiar with Polish accounting standards can further assist businesses in navigating the complexities of financial reporting in Poland. Adwisen offers you qualified and helpful assistance with your financial statements.
