Annual accounts, closing & approval
What are the steps and timeline for closing the accounting period?
The preparation of annual accounts is organized around a series of accounting operations and legal formalities:
Inventory and gathering of documents: Physical inventory of stocks, verification of cash balances and collection of supporting documents for the financial year.
Adjusting entries: Recording of depreciation, invoices to be received and issued, and adjustment of expenses and revenues to the correct financial year.
Calculating profit and taxes: Determining net accounting profit, calculating the taxable base and accounting for tax due.
The legal timeline for approval and filing:
Within 6 months of the close of the financial year: the administrative body must submit the annual accounts to the General Meeting for approval.
Within 30 days of their approval (and at the latest 7 months after the closing date): the annual accounts must be filed with the National Bank of Belgium (NBB).
How to read and analyze your balance sheet and profit and loss statement?
The annual accounts include, in particular, two supplementary financial statements:
The Balance Sheet (Statement of assets at the closing date):
Assets (What the company owns): Investments (buildings, machines, vehicles), accounts receivable, inventory and bank balances.
Liabilities (What the company owes and the origin of the capital): Equity (capital, reserves, retained earnings) and debts (bank loans, supplier debts, tax and social security debts).
Key indicator: Working Capital , which indicates whether permanent capital is financing long-term investments.
The Income Statement (Activity for the year):
It summarizes all products (revenue, services, inventory changes, financial products) and expenses (purchases, services, salaries, depreciation, financial expenses and taxes).
Key indicators: Operating profit (the operational performance of the core business) and net profit (the final accounting balance after expenses and taxes).
When and how to publish your annual accounts to the National Bank of Belgium (NBB)?
Legal entities subject to the filing obligation (in particular SRLs, SAs, SCs and the associations concerned) must transmit their annual accounts to the Central Balance Sheet Office of the BNB.
The legal deadline: The filing must be made no later than 30 days after the approval of the accounts by the General Meeting, and at the latest 7 months after the closing date of the financial year.
The schemes according to size criteria (assessed at the closing date over two consecutive financial years):
Micro-scheme: Applicable to micro-companies not exceeding more than one of the three thresholds (10 FTE workers on average annually, €900,000 turnover excluding VAT, €450,000 total balance sheet).
Abbreviated scheme: Applicable to small companies not exceeding more than one of the three thresholds (50 FTE workers on average annually, €11,250,000 turnover excluding VAT, €6,000,000 total balance sheet).
Full scheme: Mandatory for large companies (those that exceed more than two of the three thresholds or that are listed).
The filing platform: Transmission is carried out online via the official NBB application, Filing CBSO . Ascend Accountant performs compliance checks and electronic filing for your company.
What are the obligations of the General Meeting of a limited liability company (SRL/SA) when approving the accounts?
The Annual General Meeting approves the management of the past financial year and votes on the proposals of the administrative body:
Review of reports: Review of the management report (mandatory for large companies) and, where applicable, the auditor's report.
Approval of the annual accounts: The partners or shareholders vote to approve the accounts presented by the management body.
Allocation of profit and distribution: The General Meeting decides on the allocation of profit (retained earnings, carried forward, or distributed). Specific to SRLs (limited liability companies): In the event of a dividend distribution, two separate tests must be met:
The net asset test: The General Meeting cannot distribute a dividend if the net assets are (or would become as a result of the distribution) negative or less than the amount of unavailable equity.
The liquidity test: The governing body must prepare a report confirming that the company will be able to continue to pay its debts as they fall due over a period of at least 12 months.
Discharge of directors: The General Meeting decides, by a separate vote, on the discharge to be granted to the directors for the execution of their mandate during the financial year.
The minutes: Decisions are recorded in a signed minutes which are kept in the company's register of deliberations.