Introduction: The Standard of Financial Transparency
Financial statement preparation is a fundamental process for any company wishing to operate transparently and in full compliance with the law. In Georgia, this process has moved beyond mere tax obligations and has become a defining factor of business reputation. Financial statements are not just a set of numbers; they are the "health history" of a company, read by investors, banks, partners, and state agencies. Since 2016, new regulations have been implemented in Georgia requiring companies, depending on their size (Categories I, II, III, and IV), to prepare and publish financial statements on the SARAS (Service for Accounting, Reporting and Auditing Supervision) portal. Professionally prepared statements are a guarantee of business reliability and a necessary condition for attracting capital.
What Does This Service Cover?
Financial statement preparation is a complex service that includes four main components and explanatory notes. Specialists prepare:
- Statement of Financial Position (Balance Sheet): Reflects the company's assets, liabilities, and equity as of a specific date.
- Statement of Comprehensive Income (Profit & Loss): Shows revenues, expenses, and financial results for the reporting period.
- Statement of Cash Flows: Details the movement of cash funds from operating, investing, and financing activities.
- Statement of Changes in Equity: Reflects the dynamics of owners' equity during the period.
- Explanatory Notes: The textual part detailing the accounting policies used and providing breakdowns of significant items.
- Submission to SARAS: Converting and uploading the statements to Reportal.ge within the legal deadlines.
Common Situations and Scenarios
The most common scenario is the mandatory annual submission: by October 1 of each year, companies must submit audited (or unaudited, depending on category) statements for the previous year. Failure to do so results in substantial fines. A second scenario is applying for a bank loan: banks do not issue large business loans without official statements prepared according to standards (IFRS for SMEs). Also, when attracting an investor or selling a business, the buyer primarily requests financial statements from previous years to assess the company's value. Another situation is participating in state tenders, where submitting documentation proving financial sustainability is often mandatory.
Georgian Legal Framework
The legal basis for financial statement preparation is the "Law of Georgia on Accounting, Reporting and Auditing". This law divides enterprises into four size categories and sets different reporting standards for each (Full IFRS, IFRS for SMEs, or Category IV Standard). The content of the reporting must comply with International Financial Reporting Standards (IFRS). Also important is the Civil Code of Georgia, which defines management's responsibility for the accuracy of information. Legislation strictly defines submission deadlines and formats, violation of which entails administrative liability.
Process: How Are Statements Prepared?
The process begins with collecting and analyzing primary accounting data (Trial Balance). The specialist checks how well the accounting maintained for tax purposes corresponds to financial reporting standards. Often, adjustments are needed, for example: revaluation of fixed assets, inventory write-offs, or refining accruals. Then the reporting forms are filled out, and explanatory notes are written. In the final stage, the statements are reviewed with management, after which the document is prepared for signature and uploading to the SARAS portal.
Why Choose a Specialist on Legal.ge?
Specialists presented on Legal.ge possess deep knowledge of International Financial Reporting Standards and have years of experience working with the SARAS portal. Through our platform, you can find professionals who will not just mechanically fill out forms but will prepare statements that accurately reflect your business value and make it attractive to investors. Trust Legal.ge's verified experts and secure your company's financial reputation.
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