In our last post, we looked at the differences between statutory accounts and management accounts. In brief, the latter form part of internal decision-making processes, providing the financial insights that feed into business intelligence.
Statutory accounts, however, have a different purpose and focus. They are aimed at providing transparency in a company’s financial affairs for the benefit of a variety of stakeholders, both internal and external.
By law, financial statements must be prepared and submitted to shareholders and members on an annual basis. They must also be filed with the Companies Registration Office (CRO), and non-SMEs must also have their accounts externally audited.
The ins and outs of filing statutory accounts can feel daunting for business owners and company directors. As accountancy and financial management specialists, it’s one of the areas we get asked about most often. Here’s a quick run through the essentials of what you need to know.
Filing requirements
The documents companies are required to prepare and submit fall into two parts. First, company directors have an obligation to prepare a list of financial statements to share with members and shareholders every AGM. These documents are:
- A profit and loss account.
- A balance sheet.
- A directors’ report providing comment on financial performance over the previous year, and forecasts for the next.
- An auditor’s report that provides third-party expert analysis of the accounts. Small businesses with a balance sheet under €6m and/or turnover under €12m and fewer than 50 employees can claim exemption to the statutory audit requirement.
The second part involves the documents companies must file with the CRO. All of the financial statements listed above, including the auditor’s report if required, must be included along with what is known as the Annual Return. The Annual Return, also known as form B1, requires companies to update statutory information held by the CRO, namely:
- The registered office address.
- Names and details of all directors, including the appointed company secretary.
- Names and details of members, their shareholding, details of any share transfers in the previous year, and authorised and issued share capital.
Annual Return Date
Every company has an Annual Return Date which determines a) when accounts must be made up to and b) when all required documentation must be filed.
The Annual Return Date is based on when a new business must file its first return. This must happen six months after it is incorporated, though no accounts are required with this first return. The first submission date becomes the Annual Return Date. Thereafter, full returns including financial statements are required to be prepared up to that date covering the previous 12 months.
Businesses have 56 days after the Annual Return Date to submit their filings to the CRO.
Speak to an expert
Keeping up with these demands while running a busy business can create a lot of extra pressure business leaders don’t need. The good news, however, is you don’t need to do it all yourself. Taking care of statutory accounts preparation and filing is part and parcel of what we do as professional accountants, and is just one of many finance-related tasks you can outsource to our trusted experts.
