How can I correctly disclose my revenues in the financial statements?
May 1, 2024 | 45,00 EUR | answered by Alice Heck
Dear tax advisor,
My name is Dietrich Bauer and I run a medium-sized company in the automotive industry. In my annual financial statements, I am having difficulties correctly reporting my revenue. I sell both new and used cars, and also offer repair and service services. The income from the different business areas varies, and I am unsure how to properly record them in the annual financial statements.
Currently, I record all income from the sales of new and used cars as revenue, without separately considering the repair and service services. However, I am concerned that this may distort the actual revenue of my company and therefore not accurately represent my results in the annual financial statements.
I am wondering how I can properly report my revenue in the annual financial statements to ensure a realistic and transparent representation of my business figures. Are there any specific regulations or guidelines that I need to follow? Should I separate the different sources of income or is it more sensible to consolidate everything?
I look forward to your response and thank you in advance for your support.
Sincerely,
Dietrich Bauer
Dear Mr. Bauer,
Thank you for your inquiry regarding the correct presentation of your revenue in the annual financial statements. It is very important to properly record the income from various business areas to ensure a realistic and transparent representation of your financial figures.
In your case, since you sell both new and used cars and also offer repair and service services, you should disclose the revenues from the different areas separately. By presenting them separately, you will have a better overview of the individual business areas and can make more targeted decisions.
There are certain regulations and guidelines that you must follow for the correct recording of revenue. In general, you should adhere to the principles of proper accounting (GoB). According to the GoB, revenues in the income statement must be clearly and unambiguously disclosed. This means that revenues from the sale of new and used cars should be separated from revenues from repair and service services.
One option would be to create separate line items in your income statement for revenues from the sale of new cars, used cars, and repair and service services. This will give you a clear overview of the different sources of revenue and help you better understand which areas are particularly profitable.
Therefore, it is indeed useful to present the different sources of income separately to ensure a realistic representation of your financial figures. This way, you can also better identify areas that may need to be optimized.
I hope this information helps you and supports you in the correct presentation of your revenue in the annual financial statements. If you have any further questions or need assistance, I am happy to help.
Sincerely,
Alice Heck
