What statements make up a company’s accounts?
A company’s accounts are its financial statements: a balance sheet, a statement of profit and loss, a cash-flow statement unless the company is excused, and the notes that explain the figures. Section 2(40) is that list. A bank statement is not a substitute.
Which statements?
| Statement | What it shows |
|---|---|
| Balance sheet | Assets, liabilities, and equity at the year end |
| Profit and loss | Income and expenses of the year. A section 8 company may use an income and expenditure account |
| Cash flow | Cash from operating, investing, and financing. Not required of a one person company, a small company, or a dormant company |
| Notes | The accounting policies and the breakdowns the schedule requires |
A statement of changes in equity is included where it applies, which is the case for a company that keeps books under Ind AS. It is not a fifth statement of every company. Consolidated statements, where the company has a subsidiary, are a further set. What those include is on the consolidation page.
What view must they give?
Section 129 requires a true and fair view, in the form of Schedule III, on the accrual basis. The books that support the statements are kept under section 128. Why those books exist is on the books page. The small-company test, which decides the cash-flow exemption, is on the small-company page.
Where are they filed?
The board approves the statements and they are signed for the auditor. Who signs is on the signing page. After the audit and the annual general meeting, the company files them in Form AOC-4. The form is the filing. It is not itself the balance sheet.
Frequently asked questions
Four questions cover the cash-flow statement, an annual report, the members, and a bank statement.
Is a cash-flow statement always required?
No. A one person company, a small company, and a dormant company do not prepare one. Any other company does.
Is the annual report the same document?
No. The financial statements are the accounts. A listed company’s annual report can add other disclosures. Those extras are not section 2(40).
Do the members prepare the accounts?
No. The board approves them and the authorised persons sign them for the auditor. The members adopt the audited accounts at the annual general meeting.
Does a bank statement replace them?
No. A bank statement is the bank’s record of one account. The company’s accounts are the double-entry statements for the whole year.
Sources
Financial statements are defined in section 2(40) and prepared under section 129 of the Companies Act, 2013. Who signs them is section 134.