Company Financial statements and the euro
The requirement that a company keep proper books of account is contained in section 282 of the Companies Act 2014.
Section 282 provides that every company shall cause to be kept adequate accounting records, whether in the form of documents or otherwise that -
- correctly record and explain the transactions of the company,
- enable, at any time, the assets, liabilities, financial position and profit and loss of the company to be determined with reasonable accuracy,
- enable the directors to ensure that any financial statements of the company required to be prepared under section 290 or 293, and any directors report required to be prepared under section 325, comply with the requirements of the Companies Act, and where applicable, Article 4 of the IAS Regulation: and
- enable those financial statements of the company so prepared to be audited.
Section 282(3) requires the accounting records to contain-
- entries from day to day of all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place,
- a record of the assets and liabilities of the company,
- if the company’s business involves dealing in goods - (i) a record of all transactions whereby goods are purchased and whereby goods are sold, showing the goods and the sellers and buyers (except buyers of goods in ordinary retail trade) in sufficient detail to enable the goods and the sellers and buyers to be identified and a record of all the invoices relating to such purchases and sales, (ii) statements of stock held by the company at the end of each financial year and all records of stocktakings from which any such statement of stock has been, or is to be, prepared and
- if the company’s business involves the provision or purchase of services, a record of all transactions whereby services are provided and whereby services are purchased, to whom they were provided or from whom they were purchased (unless provided or purchased by way of ordinary retail trade) and of all invoices relating thereto.
Adequate accounting records are deemed to be maintained if they comply with section 283 and explain the company’s transactions and facilitate the preparation of financial statements that give a true and fair view of the assets, liabilities, financial position and profit or loss of the company. (section 283(4)).
In any case where there has been a breach of sections 281-285 of the Companies Act 2014, the statutory auditor is, not later than 7 days after notice is served on the company, required to notify the Registrar using H4 form. The Registrar then informs the CEA – Corporate Enforcement Authority.
Currency in which internal bookkeeping records ought to be maintained.
In order to comply with section 282, internal books of account should be maintained in a currency which will enable the financial position of the company to be determined with reasonable accuracy, and an audit to be carried out without difficulty.
Currency in which formal company accounts ought to be maintained.
Formal company accounts which are prepared in a currency which has legal effect as at the date on which the financial year ends are accepted for filing by the CRO.
Formal company financial statements include the following:
Annual financial statements: The requirement to prepare annual financial statements is contained in section 290 Companies Act 2014. A balance sheet, a profit and loss account and any other additional statements and information required by the financial reporting framework adopted in relation to the company are required to be prepared once at least in every financial year. The format of the balance sheet and profit and loss account is laid down in Section 291/292 of the Act prescribe the financial statements which are required to be annexed by a company to its annual return.
Group financial statements are permitted to be annexed to a company’s annual return pursuant to section 293 and are prepared in accordance with sections 294/295 Companies Act 2014.
Annual financial statements and consolidated financial statements of banks and other financial institutions must be prepared pursuant to SI 266 of 2015 (European Union (Credit Institutions: Financial Statements) Regulations 2015).
Annual financial statements and consolidated financial statements of insurance undertakings must be prepared pursuant to S.I. No.262 of 2015 (European Union (Insurance Undertakings: Financial Statements) Regulations 2015).
Certain partnerships are required by Regulation 12 of S.I. 396 of 1993 (EC (Financial statements) Regulations 1993) to prepare annual financial statements, being a profit and loss account and a balance sheet.
In addition to the above types of financial statements, summary financial statements are permitted by section 324(9) Companies Act 2014. Abridged financial statements pursuant to section 353/354 Companies Act 2014, may be filed with an annual return by a small or medium sized company. Section 340 of the Act governs the publication of full or abbreviated financial statements.