Annual financial statements and balance sheet: for GmbH, AG and sole proprietorships

What do the annual financial statements include?

The annual financial statements consist of the balance sheet, the income statement and the notes. The balance sheet shows assets, liabilities and equity on the reporting date; the income statement shows the income and expenses of the financial year. The notes add required information to the figures, such as the number of full-time positions, security provided for third parties or significant events after the balance sheet date.

Larger companies subject to an ordinary audit also prepare a cash flow statement and a management report. For most SMEs, the annual financial statements with notes are sufficient.

Year-end closing: from balances to annual financial statements

At the end of the financial year, the ongoing accounts are closed. This includes allocating expenses and income to the correct year and valuing assets and liabilities correctly:

• Record prepaid expenses and accrued liabilities
• Post depreciation on fixed assets
• Create provisions for known risks
• Value inventory and work in progress
• Review receivables and create allowances
• Reconcile current accounts with owners

Tax scope in the annual accounts

In Switzerland, the statutory balance sheet is authoritative for tax purposes: what is in the annual accounts forms the basis for taxable profit. Depreciation, provisions and allowances are permitted within the rules of the tax authority and can smooth profit over the years.

Before closing, we discuss with you what result makes sense – for example with a view to dividends, creditworthiness with the bank or a planned investment. The lowest possible profit is not always the best goal.

General meeting and appropriation of profit

For a GmbH or AG, the members' or shareholders' meeting approves the annual financial statements within six months of the end of the financial year and decides on the appropriation of profit. Before any distribution, the statutory reserves must be observed, and withholding tax is levied on dividends.

We prepare the proposal for the appropriation of profit and, on request, provide templates for the minutes.

Audit: ordinary, limited or opting out

Whether your annual accounts must be audited depends on the size of the company. Large companies are subject to an ordinary audit, SMEs usually to a limited audit. Companies with no more than ten full-time positions on annual average can waive the audit with the consent of all shareholders (opting out).

PROFINIO prepares your annual accounts; the audit is carried out by an independent auditor. We prepare the documents for the auditor and answer their questions.

Spotting capital loss and over-indebtedness early

The annual accounts also show whether equity is still sufficient. If half of the capital and statutory reserves is no longer covered, or if there is reason to fear over-indebtedness, management has legal obligations. We alert you to such developments early so that you can act in time.

The process at PROFINIO

This is how the annual accounts work with us:

• Upload year-end documents in the client portal
• Year-end closing and draft annual financial statements
• Discussion of the figures and tax options
• Final annual financial statements and proposal for the appropriation of profit
• Tax return based on the annual accounts

Frequently asked questions