Financial statements (sprawozdanie finansowe) are a fundamental element of accounting for every entity applying the Accounting Act (ustawa o rachunkowości) – in particular companies entered in the KRS (National Court Register). After the end of the financial year, businesses must prepare this document, which gives a comprehensive picture of the company's financial position and assets. Preparing financial statements requires not only knowledge of the law, but also the ability to apply accounting principles in practice.
Financial reporting is based on figures taken from the accounting records, which comprise related accounting documents and a system of accounts. The process requires particular care, because financial statements serve various groups of users – from shareholders and banks to supervisory authorities and potential investors.
Entities entered in the register of entrepreneurs of the KRS must prepare financial statements after the end of each financial year. This obligation follows directly from the Accounting Act and applies to all entities that apply it (Article 2(1)), including, for example, individuals and partnerships of individuals keeping accounting books after exceeding the threshold of EUR 2,500,000 in revenue. Businesses keeping a KPiR (tax revenue and expense ledger) or taxed under the flat-rate tax on recorded revenue (ryczałt) do not prepare financial statements
Accounting period and the periodisation principle
One of the most important accounting principles is the periodisation principle, which means recording an entity's activity in defined periods of time. These periods are bounded by conventional dates called reporting dates. The periods they define are accounting periods, which are key to the proper functioning of the accounting system.
Under the applicable rules, entities open their accounting books on the first day of each financial year. Likewise, they close them at the end of each financial year. This systematic process ensures the continuity and comparability of financial data between periods. Opening and closing the books and preparing the annual statements is work our accounting firm in Warsaw does for clients.
The periodisation principle is fundamental to preparing financial statements, because it makes it possible to determine precisely which business transactions should be included in a given reporting period. This makes it possible to present the entity's financial position reliably as at a specific balance sheet date.
Accounting periods are defined by reporting dates, which are conventional dates bounding the activity of entities. Accounting books are opened on the first day of the financial year and closed at its end, which ensures the continuity of the accounting records
Characteristic features of financial reporting
Properly prepared financial reporting must have seven key features, which ensure its usefulness and reliability. The first is reliability, which means that the reported data match economic reality. This means that all information presented in the statements must be true and reflect the actual state of affairs.
Completeness is the second important feature, meaning that the reported data should cover all of the entity's assets, the sources of their financing and its business processes. All of these elements must be reflected in the financial result, without omitting any material items.
Clarity means presenting data in a way that makes the statements readable through appropriate ordering and grouping of information. Users of the statements must be able to understand the data easily and draw the right conclusions.
Consistency means adopting uniform rules for grouping reported data, which makes comparative analysis possible across different periods and different entities.
Financial reporting has seven key features: reliability, completeness, clarity, consistency, timeliness, verifiability and continuity. All of these features must be preserved for the financial statements to perform their information and control functions
Timeliness means preparing and submitting the statements to their users within strictly defined legal deadlines. Missing deadlines may lead to financial and legal sanctions.
Verifiability of financial reporting means that the data it contains can be checked against the relevant sources. Every item in the statements must be verifiable on the basis of accounting documents.
Continuity means the need to link information from successive reporting periods properly, which makes it possible to analyse trends and changes in the entity's financial position.
Characteristics of financial statements
Financial statements are a comprehensive document providing information on the entity's assets, the sources of their financing, the course of its business processes and the material and financial results of its activity. They are therefore a set of accounting data providing detailed information on the company's financial position.
Under Article 45(1) of the Accounting Act, financial statements are prepared as at the date of closing the accounting books and as at another balance sheet date. This provision precisely defines when an entity must prepare financial statements.
Article 45(2) of the Accounting Act sets out the components of financial statements in detail. They consist of three basic elements: the balance sheet, the profit and loss account and the notes, which comprise an introduction to the financial statements and additional information and explanations. Entities other than micro and small entities also prepare a statement of changes in equity (fund) and a cash flow statement (Article 45(3)).
Under Article 45(2) of the Accounting Act, financial statements consist of the balance sheet, the profit and loss account and the notes, comprising an introduction to the financial statements and additional information and explanations. All of these elements are mandatory and must be prepared in line with the law
In addition, the management report (sprawozdanie z działalności) is attached to the financial statements if the obligation to prepare it follows from the Act or other regulations. Financial statements and the management report are prepared in Polish and in Polish currency, which ensures consistency and comparability of data.
Figures may be rounded to thousands of zlotys, provided that this does not distort the picture of the entity presented in the financial statements and in the management report. This option makes the statements easier to read, especially for large entities.
Formal requirements for financial statements
Financial statements must meet certain formal requirements to be considered properly prepared. The document must include the name of the entity, its address and the statistical number of the entity preparing the statements. This identification data is necessary to assign the statements correctly to a specific entity.
Another requirement is to specify the reporting moment, that is, to indicate the exact balance sheet date as at which the statements were prepared. The date of preparation and the signatures of the persons responsible for preparing the statements are also required.
Financial statements perform three key functions in the accounting system. The first is the reporting function, which serves to control and examine the entity's activity. This function makes it possible to monitor the effectiveness of the business and take appropriate management decisions.
Financial statements must include the name, address and statistical number of the entity, the reporting moment, the date of preparation and the signatures of the persons responsible for preparing them. Signing the financial statements confirms that they meet the requirements of the Accounting Act (Article 52(2a))
The documentation function means that the statements form the basis for closing and opening the books in successive accounting periods. This ensures the continuity of accounting and the proper carrying forward of balances between periods.
The presentation function serves to assess the financial position by various groups of users, including shareholders, banks, individuals and other entities interested in the entity's financial condition. This function is particularly important in decisions on investments or lending.
How to prepare financial statements
Preparing financial statements requires a systematic approach to three main components: the balance sheet, the profit and loss account and the notes. Each of these elements has its own specific features and requires appropriate preparation of accounting data.
The balance sheet shows the entity's assets and the sources of their financing, that is, its equity and liabilities. These data are presented as at the end of the current and the previous financial year, which allows comparative analysis. Assets and equity and liabilities present the same resources from different points of view, so total assets must always equal total equity and liabilities.
The profit and loss account separately presents revenue, costs, gains and losses and mandatory charges on the financial result for the current and previous financial year. This element of the statements provides information on the size of the company's financial result and the structure of its individual revenue and costs, which is key to assessing profitability.
The balance sheet presents the entity's assets and the sources of their financing as at the balance sheet date, and total assets must always equal total equity and liabilities. The profit and loss account shows revenue, costs, gains and losses for the whole financial year, allowing profitability to be assessed
Detailed requirements for the notes
The notes (informacja dodatkowa) are the third, equally important element of financial statements. They should contain material data and explanations presenting the entity's assets, financial position and financial result fairly and clearly. This element is key to fully understanding the entity's financial position.
The notes must above all include an introduction to the financial statements describing the accounting principles adopted, including valuation methods and the method of preparing the financial statements. It is particularly important to present the extent to which the Act leaves the entity a choice, and the reasons for and effects of any changes compared with the previous year.
In addition, the notes should contain additional information and explanations on items of the balance sheet, the profit and loss account, the statement of changes in equity and the cash flow statement for the reporting periods covered by the financial statements.
It is also necessary to present the proposed distribution of profit or coverage of loss, which is important for shareholders and other stakeholders. The notes must also include basic information on employees and the entity's bodies, and other information material to understanding the financial statements.
Procedure for preparing financial statements
Preparing financial statements requires following a defined procedure that ensures the document is complete and correct. The process can be divided into several key stages:
- Preparing accounting data for the whole financial year
- Checking that the accounting entries are correct and complete
- Preparing the balance sheet on the basis of the balances of balance sheet accounts
- Preparing the profit and loss account on the basis of income statement accounts
- Drafting the notes with explanations
- Checking the consistency of all elements of the statements
- Signing of the statements by the persons responsible
Each of these stages requires particular attention and accuracy. Errors made at any stage may affect the reliability of the entire financial statements and require corrections.
Preparing financial statements requires going systematically through all stages, from preparing accounting data to the signing of the document by the persons responsible. Each stage is key to the correctness of the whole statements
Characteristics of electronic financial statements
Electronic financial statements (e-sprawozdanie) are financial statements prepared in electronic form, in the appropriate logical structure and format. Financial statements are prepared in the logical structure and format published by the Ministry of Finance by entities entered in the register of entrepreneurs of the KRS (Article 45(1g) of the Accounting Act), and also by CIT (corporate income tax) and PIT (personal income tax) taxpayers outside the KRS, who send their statements to the Head of KAS (National Revenue Administration) (Article 27(2) of the CIT Act, Article 45(5) of the PIT Act). The exception is entities preparing financial statements under International Accounting Standards, which use a different format (Article 45(1ga)–(1h)). Deadlines are covered in our article on who prepares financial statements and when they must be filed.
Under the current law, financial statements and the accompanying documents are submitted only in electronic form. This is a significant change compared with previous years, when statements could be submitted on paper.
Electronic financial statements must meet certain technical requirements. Above all, they must be saved in a specified structure and file format that allows the data to be processed automatically by the supervisory authorities' IT systems.
Electronic financial statements must be prepared in electronic form in the appropriate logical structure and format. This obligation applies to entities entered in the register of entrepreneurs of the KRS and to PIT and CIT taxpayers sending their statements to the Head of KAS, except for entities preparing statements under IAS
Another requirement is signing with a qualified electronic signature, a trusted signature (podpis zaufany) or a personal signature (podpis osobisty) (Article 45(1f)) by the person entrusted with keeping the accounting books and by the head of the entity. If the entity is managed by a multi-member body, the statements are signed by all members of that body or by at least one of them – after the others have submitted statements that the financial statements meet the requirements of the Act (Article 52(2) and (2b)).
Technical requirements for electronic financial statements
Electronic financial statements should be generated as a single XML file containing all mandatory elements of the statements. This means that the balance sheet, the profit and loss account and the notes must be contained in one file with a specified structure.
The Ministry of Finance has made available a dedicated e-Sprawozdania Finansowe application in which financial statements can be prepared in the appropriate format. The application ensures compliance with the technical requirements and makes the preparation process easier.
The management report should be prepared in electronic form, but without a prescribed format, which means more flexibility in preparing it. However, the resolution or decision approving the annual financial statements and the resolution on the distribution of profit or coverage of loss do not have to be prepared in electronic form. It is therefore acceptable to attach scans of these documents to the filing. The technical requirements for electronic financial statements are described separately.
| Document | Required format | Method of signing | Notes |
|---|---|---|---|
| Electronic financial statements | XML | Qualified, trusted or personal signature | One file with all elements |
| Management report | Electronic, no set format | Qualified electronic signature | More flexibility |
| Approval resolution | Any | May be a scan | No XML format required |
| Profit distribution resolution | Any | May be a scan | No XML format required |
Signing electronic financial statements
Financial statements and the accompanying financial documents must be signed electronically – with a qualified electronic signature, a trusted signature or a personal signature. This requirement is fundamental to the validity of the document and its acceptance by the supervisory authorities.
Financial statements are signed by the person entrusted with keeping the accounting books and by the head of the entity. If the entity is managed by a multi-member body, the statements are signed by all members of that body or by at least one of them, if the others submit statements that the financial statements meet the requirements of the Act (Article 52(2b)). This rule ensures accountability for the correct preparation of the statements.
A refusal to sign by any of the persons obliged to sign requires a written justification attached to the financial statements. A refusal to submit such a statement is equivalent to a refusal to sign (Article 52(2b)). The justification must contain the reasons for the refusal and is attached to the financial statements.
Financial statements must be signed with a qualified electronic signature, a trusted signature or a personal signature by the person keeping the accounting books and the head of the entity. In the case of a multi-member body, all members sign, or at least one of them after the others have submitted statements
Deadlines for financial statements
Under the applicable rules, financial statements should be prepared no later than 3 months after the balance sheet date. Article 52(1) of the Accounting Act specifies that the head of the entity ensures that the annual financial statements are prepared no later than 3 months after the balance sheet date and presents them to the competent bodies in line with the applicable rules.
Financial statements are signed – with the date of signing – by the person entrusted with keeping the accounting books and by the head of the entity (Article 52(2) of the Accounting Act). For financial statements to be fully prepared within the meaning of the Accounting Act, they should be signed within 3 months of the balance sheet date by both the person keeping the accounting books and the head of the entity.
Approval of the financial statements is the next stage of the process and should take place within 6 months of the balance sheet date, that is, the last day of the financial year. If the financial year is the calendar year, the deadline is 30 June.
Financial statements must be prepared within 3 months of the balance sheet date and approved within 6 months of that date. For a financial year equal to the calendar year, the approval deadline is 30 June
Article 53(1) of the Accounting Act provides that an entity's annual financial statements are subject to approval by the approving body no later than 6 months after the balance sheet date. There is, however, an exception in Article 53(2b) of the Accounting Act, under which the annual financial statements of a branch of a foreign entrepreneur are deemed approved if the financial statements of the foreign entrepreneur covering the data of that branch's financial statements have been approved.
Filing electronic financial statements with the KRS
Entities entered in the KRS file their electronic financial statements together with a copy of the resolution approving them and on the distribution of profit or coverage of loss (and the management report and audit report, if required) only with the KRS – they do not send them separately to the Head of KAS (Article 69(1) of the Accounting Act, Article 27(2) of the CIT Act). They have up to 15 days from the date of approval of the annual financial statements to do so.
This deadline is key to complying with the law. Missing it may lead to fines imposed by the registry court in coercive proceedings (Article 24 of the National Court Register Act) and to criminal liability of the head of the entity (Article 79(4) of the Accounting Act). Entities should therefore plan the process of preparing, approving and filing their financial statements carefully.
Practical example: A limited liability company (sp. z o.o.) engaged in trade ended its financial year on 31 December 2025. It had to prepare its financial statements by 31 March 2026, approve them by 30 June 2026 and then file the electronic financial statements with the KRS within 15 days of approval by the shareholders' meeting.
Consequences of missing deadlines
Missing deadlines for financial statements may lead to various sanctions. Anyone who, contrary to the Act, does not file financial statements with the competent court register is liable to a fine or restriction of liberty (Article 79(4) of the Accounting Act), and the registry court may impose fines in coercive proceedings (Article 24 of the National Court Register Act). In extreme cases – where, despite a summons, the statements for 2 consecutive financial years have not been filed – the court initiates, of its own motion, proceedings to dissolve the entity without liquidation, which may end with its removal from the register (Article 25a(1)(4) of the National Court Register Act). In addition, late filing may harm the entity's credibility with banks and business partners.
Entities should therefore put in place appropriate procedures to ensure that financial statements are prepared and filed on time. It is also worth using the services of professional accountants with experience in preparing financial statements in line with the applicable law.
Entities entered in the KRS must file their electronic financial statements within 15 days of the date of approval of the annual financial statements. Missing this deadline may lead to fines from the registry court and criminal liability of the head of the entity
The most common mistakes in preparing financial statements
When preparing financial statements, entities often make mistakes that may affect the reliability of the document. The most common problems are:
- Incorrect grouping of balance sheet items
- Errors in the valuation of assets and liabilities
- Incomplete or incorrect notes
- Inconsistencies between the balance sheet and the profit and loss account
- Incorrect application of accounting principles
- Errors in converting foreign currencies
- Incorrect settlement of income tax
To avoid these mistakes, entities should put in place appropriate control procedures and use the help of experienced accountants. Regular training of accounting staff also helps to improve the quality of the statements prepared.
