Annual Financial Statements
Definition: Annual financial statements are financial reports based on a 12-month consecutive period (either a company’s fiscal year or the calendar year) and consist of a summary of the following information: income statement, balance sheet, statement of retained earnings and statement of cash flows.
Preparing an annual financial statement (AFS) for your business or partnership, or for personal tax purposes can be a daunting task. Not least of which is that the International Financial Reporting Standards (IFRS) publishes amendments and updates annually. These impact the way financial statements are completed and presented. The Companies and Intellectual Property Commission (CIPC) also has specific requirements for preparing annual financial statements in terms of formatting that may be tricky to negotiate.
The qualified accountants at Grid Forensic Accounting are informed of and kept up to date with all these amendments and, using best practice, can compile annual financial statements for your closed corporation, private company, partnership or sole proprietorship according to the IFRS.
The importance of an independently compiled annual financial statement
An annual financial statement provides an overview of a company or individual’s business, including financial position, cash flow and assets, among others.
An annual financial statement that is compiled by an independent accountant is important because:
- it paints a picture of the health of a business, which is important for investors.
- it can establish creditworthiness, which impacts the potential for future lending.
- it is required for SARS compliancy when submitting income tax returns (ITR14).
- it is one of the requirements for a company audit.
Grid Forensic Accounting is well positioned to compile your annual financial statement as our tax specialists understand that clients require efficient turnaround times; they use the requisite financial reporting software, ensure our reporting is fully compliant with SARS requirements and operates in line with the South African Companies Act. We’re also able to perform the duties of an accounting officer and we can get your company audit ready.
Annual financial statement costs
Fees may vary depending on the complexity of the client’s situation, the amount of documentation required for assessment and the extent of any relevant investigations.
Because everyone’s needs and situations are so different, it is not possible to provide an exact costing. We can, however, assist by reviewing the prospective client’s information at our obligation-free initial consultation and provide an estimated cost at their request. No charge will be made for this review should they not continue with our services.