FS
Financial statements for a small Cyprus company
Financial statements are the company's yearly report card: what it owns and owes (balance sheet), what it earned and spent (profit and loss), and notes explaining the numbers. They follow IFRS in Cyprus.
Who needs it
Every Cyprus company; they are audited and filed with the Registrar of Companies and the Tax Department.
When and where to file
Deadline: Audited and ready in time for the IR4; filed with the Registrar with the annual return (HE32).
Where: Prepared by your accountant, audited by a licensed auditor, filed with the Registrar of Companies and the Tax Department.
Step by step
- 1Close the books: reconcile bank accounts, record all invoices and bills.
- 2Prepare the profit and loss statement and the balance sheet.
- 3Write the notes: accounting policies, fixed assets, related parties.
- 4Directors approve and sign; the auditor gives the audit report.
- 5File with the Registrar and use for the IR4 tax return.
Worked example
Illustrative figures only.
Statement of profit or loss
| Revenue | €480,000 |
|---|---|
| Cost of sales | (€260,000) |
| Gross profit | €220,000 |
| Administrative expenses | (€100,000) |
| Profit before tax | €120,000 |
| Income tax | (€16,200) |
| Profit for the year | €103,800 |
Statement of financial position
| Property, plant & equipment | €45,000 |
|---|---|
| Trade receivables | €62,000 |
| Cash at bank | €138,000 |
| Total assets | €245,000 |
| Trade payables | (€41,000) |
| Tax payable | (€1,200) |
| Net assets / equity | €202,800 |
Notes (headings)
| 1. Accounting policies | IFRS as adopted by the EU |
|---|---|
| 2. Property, plant & equipment | Cost less depreciation |
| 3. Related party transactions | Director's remuneration €36,000 |
What these statements tell you about the year
Think of the profit and loss statement as the story of the year: the company sold €480,000 of goods or services, spent €260,000 to deliver them, and was left with €220,000 of gross profit. After paying €100,000 of running costs (rent, salaries, professional fees), it earned €120,000 before tax, and €103,800 after the 15% corporate tax.
The balance sheet is a photograph on the last day of the year: what the company owns (€245,000 of equipment, money customers still owe and cash in the bank) minus what it owes (€41,000 to suppliers and €1,200 of tax) leaves €202,800 of net assets - the value that belongs to the shareholders.
The notes are the fine print that makes the numbers trustworthy: which accounting rules were followed, how equipment loses value over time, and any dealings with the directors, which must always be disclosed.
- Is it profitable?
- Yes - €103,800 profit on €480,000 of sales, a margin of about 22 cents per euro sold.
- Can it pay its bills?
- Comfortably - €138,000 of cash and €62,000 owed by customers against €42,200 of debts.
- Is the tax right?
- The €16,200 tax charge is 15% of the €108,000 taxable profit from the IR4, after adjustments.
- What to watch
- €62,000 of unpaid customer invoices - if customers pay late, cash gets tight even in a profitable year.
Common mistakes
- Unreconciled bank balances
- Director loans not disclosed
- Leaving the audit until the last month
Talk to a Cyprus accountant this week
Free 30-minute consultation. Clear fixed-fee proposal.