The formats of a profit and loss account and balance sheet, as well as the requirements concerning appended notes, are defined in two different decrees. One of them lays down the regulations for drawing up the financial statements for small enterprises and microbusinesses. The older one, the Accounting Decree, contains the financial statement regulations applicable to large corporations and companies larger than small enterprises.
A profit and loss account can be prepared by type of expense or by function. Usually, the format based on expense type is used. There is a specific profit and loss account format for operations based on real estate management.
Statement of cash flows
The information required to be provided in the statement of cash flows includes, for example, the company’s profits from its operating activities, the allocation of cash flows into investments, and changes in the company’s equity and liabilities during the financial period. Small enterprises and microbusinesses are not required to draw up a statement of cash flows.
Small enterprises and microbusinesses
The formats of the profit and loss account and balance sheet to be used by small enterprises and microbusinesses are defined in the Decree on the required information of the financial statements of small enterprises and microbusinesses (1753/2015).
More information: Company size