Sections of the annual accounts

The balance sheet
A balance sheet reflects the position of the company at a given time. This is usually 31 December, but other dates are possible. The entrepreneur will then look at the entire situation of the company at that moment. Debts, assets, outstanding accounts - everything is added up to create the balance sheet.

The profit and loss account
A profit and loss account indicates what has been earned throughout the accounting year and what costs have been incurred. When one is set off against the other, this reveals whether the company has made a profit or loss.

Notes to the annual accounts
The amount of detail contained in the notes depends on the size of the company. For a small company, the notes may simply be a brief indication of how the balance sheet was compiled, together with a statement as to the number of employees. For a large company, the notes may form a complete book, including details of directors' remuneration, for instance.