How can I present the profit of my company in the annual financial statement?
September 24, 2023 | 40,00 EUR | answered by Fanni Ehrig
Dear tax advisor,
My name is Edith Hausdorf and I am the managing director of a small company specializing in the production and sale of handmade furniture. Over the past few years, we have been able to steadily grow and have seen a continuous increase in revenue. Now I am faced with the challenge of accurately and transparently presenting my company's profit in the annual financial statements.
At the moment, I am unsure of how exactly to calculate and report my company's profit in the annual financial statements. With various costs such as material costs, personnel expenses, rent, and other operating expenses, it is difficult for me to keep track and include the correct items in the financial statements.
I am also concerned about whether my company's profit is being calculated correctly and if I am possibly overlooking any tax advantages or disadvantages. I want to ensure that the annual financial statements are accurate and that our company reflects a realistic profit situation.
Could you please explain to me the specific steps I need to take to accurately report my company's profit in the annual financial statements? Are there any specific regulations or guidelines I need to follow? What opportunities are there to optimize tax effects and maximize our company's profit?
I thank you in advance for your help and look forward to your support in creating a meaningful annual financial statement.
Sincerely,
Edith Hausdorf
Dear Mrs. Hausdorf,
Thank you for your inquiry and for trusting in my expertise as a tax advisor. I understand the importance of accurately presenting the profit in the annual financial statements for you as the managing director of your company, in order to present a realistic profit situation and optimize potential tax benefits.
In order to accurately represent your company's profit in the annual financial statements, it is important to accurately record and consider various types of costs such as material costs, personnel costs, rent, and other operational expenses. It is crucial to make a clear distinction between business and private expenses in order to enable a reliable profit calculation. Additionally, you should also pay attention to any special depreciation or extraordinary income that may affect the profit.
There are various regulations and guidelines to be followed when preparing the annual financial statements. As the managing director of a small company, you likely have the choice between a simple income-statement method (EÜR) and double-entry bookkeeping. The EÜR is particularly suitable for small businesses with low turnover, while double-entry bookkeeping is recommended for businesses with higher turnover and more complex business processes.
In double-entry bookkeeping, you need to systematically record all business transactions and post them to accounts. This involves capturing the assets and liabilities as well as the income and expense positions of your company. Based on these entries, the annual financial statements are prepared, consisting of the profit and loss statement, the balance sheet, and the notes.
There are various ways to optimize tax effects and maximize your company's profit. These include taking advantage of tax depreciation options, considering tax allowances, or planning investments for tax relief. An experienced tax advisor can support you in this and show you individual tax planning options to maximize your profit and avoid tax disadvantages.
I recommend seeking professional support from a tax advisor to ensure that your annual financial statements are accurate and meaningful. I am available for further questions and personal consultation.
Best regards,
Fanni Ehrig
