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Management report in Estonia (0)

Mis on tegevusaruanne

 

Accounting entities are required to prepare annual financial statements for the economic year ended. The annual report in Estonia is normally submitted in January-June. The managerial report is a part of the annual report prepared by the company management board. The requirements for the managerial report are set by the Estonian Accounting Act.

What does the Management report contain?

The Management report provides an overview of the company activities both in past and in future. The Management report reveals the company’s history, financial results and its future plans.

(1) A management report shall provide an overview of the activities of the accounting entity, circumstances which are material to the assessment of the financial position and business activities of the accounting entity, significant events which have occurred during the financial year and the likely future developments in the following financial year. (§ 24. Management report).

The activity report must include:

  • main areas of the company’s activities, product and service groups;
  • the most important investments made during the financial year and planned in the near future;
  • significant research and development projects and related expenses in the reporting year and subsequent years;
  • significant events that are not reflected in the financial statements, but which may affect the results of the following financial years.

 

 

In addition to the previous items, the accounting entities whose annual accounts are audited must describe the following items in the annual report:

  • the general (macroeconomic) development of the company’s operating environment and its impact on its financial results;
  • seasonality of business or cyclicality of economic activity;
  • significant environmental and social impacts of the business;
  • risks related to changes in exchange rates, interest rates and stock exchange rates during the financial year and the reporting period;
  • the main financial ratios for the financial year and for the previous financial year as well as the methodology for their calculation.

In other words, the obligation to audit arises for those companies whose sales revenue during the financial year is at least 4 million euros, the volume of assets per financial year is at least 2 million euros and the average number of employees for the financial year is at least 50.

(4) If at the balance-sheet date the owners’ equity of the accounting entity does not comply with the requirements established by the Commercial Code the activities planned for restoration of owners’ equity shall be described in the management report. (§ 24. Management report).

The content of the managerial report is set out in more detail in § 24 of the Accounting Act.

Who must submit a Management report?

The activity report must be submitted by all companies except micro-companies. The report can be written in free form, there are no strict presentation requirements for this report. The Management report is visible to all people, so the content of the report should be well thought out.

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ATTENTION! The topics and articles in SimplBooks blog may not be legally accurate and we recommend to consult with a professional. The authors of SimplBooks do their best, but do not take any responsibility for mistakes in the articles. Laws that change over time must also be taken into account.

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