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February 26th 2014 / BY: Wisteria

Accounting Service Explained – What is included in the Annual Accounts?

Filing the annual accounts is one key accounting service that new company formation owners will need assistance with after they set up a company. Annual accounts are the yearly company accounts that should be presented to shareholders after each financial year and filed with Companies House. This document should not be mistaken for the annual return, which is a separate document that it is also a requirement to file with Companies House every year.

The accounting period differs between each company, and therefore does not necessarily follow a calendar year. The first financial year begins on the date of incorporation. Subsequent financial years follow in a continuing sequence from the day after the end of the previous financial year.

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The accounts must be accompanied by a number of reports, namely the directors’ report and the auditor’s report (where applicable). The directors’ reports outlines the financial position of the company and its’ potential. The report may cover a number of different areas, depending on the company’s activity throughout the year and would usually include directors’ details, donations and trading activities amongst others. The auditor’s report states whether the annual accounts have been compiled in the correct manner and is a compulsory part of the process of annual accounting for larger corporations.  This should be signed by the auditors on or after the date that the board of directors approved the balance sheet and director’s report. These reports help to increase transparency for the shareholders, informing their decisions.

In accordance with the Companies Act 2006, the director of a company should prepare the company’s individual accounts including a profit and loss account in respect of each financial year and a balance sheet as at the end of the financial year.

A director is required to file the approved and signed annual accounts, director’s report and auditor’s report with the Registrar of Companies at the end of the financial year.

The filing requirements differ depending on whether your company is a medium sized company, dormant, public or private company and whether the company is listed or not listed. For example, small companies and those that are dormant may not need to file an auditor’s report as they are exempt from audit. As such you should check what you are required to submit for your company formation with a firm of Chartered Accountants.

Wisteria provides a wide ranging accounting service that includes the preparation of the annual accounts. If you would like more information on annual accounts and our accounting service please contact Wisteria on 020 8951 0140 or send an e-mail to info@wisteria.co.uk .