3 Different Types of Statutory Accounts

 

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statutory-accounts

 Statutory accounts are a series of financial reports prepared at the end of each fiscal year that documents the limited company's financial performance and activities throughout the year. They are also known as annual or yearly accounts.

These accounts are shared with HMRC (Her Majesty's Revenue and Customs), Companies House, shareholders, and all the attendees at the company's general meetings. All private limited firms in the UK are required to prepare statutory accounts.

Here are different types of statutory accounts you should know about.

Profit and Loss Statement

An income statement is the most common financial statement, and it measures a company's financial performance annually, quarterly, or monthly.

It shows the company's expenses and revenues, including non-cash accounting like amortization and depreciation. To determine a company's success, it examines the money earned, spent, and profit or loss incurred because of revenue and expenses.

The income statement profit or loss, also known as a net burn or net profit, is then used to calculate cash flow from activities. The net burn, also known as net profit, is the first line item on the cash flow statement.

Statement of Cash Flow

Annual, quarterly, or monthly cash flow statements display the outflows and inflows of your organization over time. It covers accounts receivable and payable and all changes to the balance sheet and current operational outcomes. Non-cash accounting factors like amortization and depreciation aren't included in business cash flow statements.

Balance Sheet

A balance sheet is a financial statement that shows the assets, liabilities, and equity of a corporation. The formula is as follows:

Liabilities + Owner's Equity Equals Assets

Assets

A corporation's assets are the resources it has to operate its business. There are two sorts of assets: current and fixed. Current assets are easy to sell and are cash-based. Property, plant, equipment, autos, and other long-term investments known as fixed assets.

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Liabilities

Liabilities are debts owed by a company to third parties, usually in cash. There are two types of liabilities: current and long-term obligations. Current liabilities are payable in the next twelve months and all debts payable after twelve months are long-term liabilities.

Equity

Shareholder's equity depicts the amount of money under the possession of a company's shareholders after paying off all debts and liquidating all assets. It depicts a company's overall value and financial health during mergers and acquisitions.

If you’re on the lookout for top-notch accountant services in Walsall, look no IBISS & CO. They are one of the best-chartered accountants and business advisors who will guide you every step of the way. They can also help reduce your tax bills!

Contact them today for more details.

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