Year-end Closing Accounting

The Procedure of Year-end Closing Accounting

Годишното счетоводно приключване е трудоемък процес, който е обусловен от множество определящи компанията фактори. В зависимост от юридическия статус, предмета на дейност и икономическия отрасъл, годишното счетоводно приключване би могло да включва разнообразни законови изисквания и счетоводни модели на изпълнение. Заобикалящата среда също оказва влияние на годишното счетоводно приключване на дружествата. В зависимост от икономиката на страната и корпоративните отношения със заинтересованите страни, изготвянето на годишен финансов отчет би могло да налага различни действия от страна на счетоводния отдел или кантора. В идеалния случай годишното счетоводно приключване задължително налага изготвянето на организирана подготовка, която да позволи коректното отчитане на наличната документация, отразяваща дейността на компанията през изминалия отчетен период.


What is year-end closing accounting?

The annual accounting close is a specific process of summarizing the company's activities during the past fiscal year. The legal framework determines that the annual accounting close must coincide with the end of the calendar year. There is also periodic accounting closing, which is performed for internal company purposes and may be scheduled for shorter time periods. The annual accounting closing basically represents the closing of the income and expenditure statements and preparation of an annual financial report but the entire process of performing an annual accounting closure involves much more thorough organization, analysis, corrections, and professionalism to ensure the credibility of the final report.

Year-end Closing Accounting 1

In order to guarantee the organization of the necessary documentation for the annual accounting closing and, above all, to submit the accompanying declarations within the agreeable terms, it is accepted to start the procedure for the implementation of the annual accounting closing at the beginning of the last calendar month. Strict planning of the stages through which the annual accounting closure passes can guarantee us peace of mind during this procedure. At the same time, we can trust the annual accounting services of an accounting office that has the necessary experience in organizing and shaping the complete documentation.


Preparation for annual accounting closing

The annual accounting closing requires a preparation made in advance, of an internal schedule by the compiler of the annual financial report. This schedule must present the separate stages of the annual accounting closure by terms of execution, materially responsible persons and types of reports. After the schedule is accepted by the managers of the company, an order is issued to confirm the distribution of duties in the execution of the annual accounting closing.

The preparation for the annual accounting closing begins with the processing of the primary accounting documentation, which must be put in order, in accordance with the requirements of the Accounting Law. All relationships with partners that arose and ended during the year, as well as partnership agreements of the company, are analyzed. For the needs of the annual accounting closure, interest is charged on granted and received commercial loans from partners, invoices are issued for rent installments with expired terms and expenses for those due are reported. During the preparation for the annual accounting closing, a review of the judicial and awarded receivables and liabilities is made, as well as the financial relations are settled according to tax audit acts.

Year-end Closing Accounting 2

Годишното счетоводно приключване отчита и вътрешнофирмените отношения със служители, като се осчетоводяват всички сметни взаимоотношения по предоставени аванси и разходи за командировки в страната и чужбина. Подготовката на годишното счетоводно приключване се занимава и с възникнали през отчетния период рекламации, дарения, спонсорства и други причини за безвъзмездно предоставяне на средства


Inventory in terms of annual accounting closing

The official annual accounting close requires an inventory of the company's assets and liabilities as of the balance sheet date. The accounting law provides for the regular performance of an inventory to ensure their correct presentation in the annual financial report. The management of the company only determines its model of action according to the needs of the business and the preferences of the accounting department or the recommendations of the external accounting firm. The annual accounting closing covers tangible fixed assets (TPA), with the aim of correcting any differences between the actual assets and their accounting-documented expression. In parallel with the TPA, in the process of annual accounting closure, the following are inventoried and checked:

  • short-term assets
  • the cash of the company in the respective currencies
  • capital investments in other enterprises
  • the funds paid in advance

The inventory of the company's liabilities at the time of the annual accounting closure aims to establish the actual valuation of each liability against the data from the accounting registers. Liabilities are distinguished as current and non-current and on this basis their reporting in the documentation of the annual accounting close is determined. When establishing an obligation with an expired statute of limitations, it should be written off from the company's liabilities, reported in the financial statement during the annual accounting closing.

Year-end Closing Accounting 3

The stages of annual accounting closure include checking the accumulated depreciation during the year and review for changes in the useful life of non-current assets. Accountants should also review the useful life of fixed tangible assets and note the possible adjustment, as well as discard those TPAs that are fully depreciated for the needs of the company.

The following parameters are also taken into account for the inventory of assets and liabilities during the annual accounting closing:

  • Age analysis of customers intake
  • Overdue customer takings/obligations review
  • Verification of expenditure in relation to staff income
  • Check for conditions for recognition/change of provisions
  • Checking the technology of closing accounting accounts
  • Calculation of current and deferred taxes


The Procedure of Year-end Closing Accounting

What is year-end closing accounting?

Preparation for annual accounting closing

Inventory in terms of annual accounting closing


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