Accounts - Poland
The Accounting Act lays down the rules of accounting and preparing financial statements.
Business units keep accounts in accordance with double-entry rules.
Accounting ledgers should be kept with due care and attention making sure that they are accurate, systematic and verifiable.
All financial events that take place during a given period should be recorded in the accounts for this reporting period. All events should be entered in the accounts in accordance with the accounting documents that confirm that the transactions took place. The accounts of a given entity should include all revenues and related costs for a given financial year irrespective of their payment date.
Account ledgers include:
- journals (containing a chronological list of events that occur in a given reporting period);
- general ledgers (contain systematic entries of events according to the double-entry rule; they should also contain events recorded in journals);
- subsidiary ledgers (contain entries that expand on the entries contained in general ledger accounts);
- trial balance of general ledger and subsidiary ledger accounts (trial balance of the general ledger is prepared at the end of each reporting period, at least at the end of each month, on the basis of entries in general ledger accounts);
- list of assets and liabilities (inventory) (as confirmed by a calculation of all assets and liabilities, prepared by entities which previously did not keep accounts in the manner set out in legislation; in other entities the trial balance of the general ledger accounts and the balance of subsidiary ledger accounts prepared at the closure of accounts act as the inventory).
Audits and announcements
The purpose of an audit of a financial statement is to provide a written opinion from an auditor together with a report on the statement’s compliance with the accounting rules (policy) used and to state whether it gives a reliable and credible picture of the material and financial situation and of the financial results of the entity under assessment.
The annual consolidated financial statements of groups of companies and the annual financial statements of entities that are continuing trading have to be audited and published. These include:
- banks, insurance and reinsurance companies;
- entities operating on the basis of the regulations on securities trading and investment funds;
- units that operate on the basis of the regulations on the organisation and functioning of pension funds, and joint stock companies, excluding companies which are in the process of formation on the balance sheet day;
- other entities that in the financial year, for which the financial statements were prepared, met at least two of the following criteria:
- average annual full-time employment of at least 50 people;
- total balance sheet assets at the end of the financial year were the PLN equivalent of at least €2.5 million;
- net revenues from sales of goods and products and from financial operations for the financial year were the PLN equivalent of at least €5 million.
The audit requirement also applies to the financial statements of bidding companies and of newly formed companies – prepared for the financial year in which the merger took place - as well as annual financial statements of entities that are prepared in accordance with International Accounting Standards.
Annual joint financial statements of investment funds with separated sub-funds as well as individual annual financial statements of sub-funds are subject to audit and publication.
On the last day of each financial year entities carry out a count of:
- cash (excluding cash held in bank accounts), securities in the form of tangible assets, current tangible assets, fixed assets and real estate classified as investment, as well as machines and equipment which are part of capital work in progress. These items are subject to stocktaking, valuation of quantities, comparison of values with the data in accounts, and explanation and settlement of any differences;
- financial assets in bank accounts or held by other entities, including securities in the form of intangible assets, monies due, including loans granted, or own assets entrusted to contractors. These are subject to confirmation by banks and contractors that the state of these assets shown in the entities’ accounts is correct, as well as explanations and settlement of any differences;
- fixed assets to which access is significantly hindered, land and property rights, disputed receivables and bad debts, debts of companies at risk in banks, payables and receivables from persons who do not keep accounts, public receivables and payables, as well as assets and liabilities not listed in points 1 and 2 as well as those listed in points 1 and 2, if stocktaking was not possible. This is carried out by a comparison of data in the accounts with the relevant documents, and a verification of the value of these assets.
Stocktaking also includes assets which are owned by other entities, and were given to the entity for sale, storage, processing or use. These entities should be informed about the results of the stocktaking.
The deadline and frequency of stocktaking is considered to be met if the inventorisation of:
- assets (excluding cash, securities, semi-finished products and ready goods, products and materials, where a manager within the entity has selected a subsidiary account method that involves writing-off the value of materials and goods on the day of their purchase, or ready products at the time they are produced. It involves determining the state of these assets and their valuation, as well as the adjustment of costs by the value of this state no later than on the balance sheet day) commences no earlier than three months by the end of a financial year and is completed by the 15th day of the next year;
- stocks of materials, goods, ready and semi-finished goods in secured storage are included in qualitative and quantitative records is carried out once in two years;
- real estate included in fixed assets and investments as well as other fixed assets, machines and equipment which are capital work in progress and which are kept in secured storage is carried out once in four years;
- stocks of goods and materials (packaging) included in qualitative records in retail sales outlets of a business unit is carried out once a year;
- stocks of wood in units involved in forestry activities is carried out once a year.
The stocktaking also takes place on the day a business unit ceases operation and on the day preceding the date a business unit goes bankrupt or into liquidation.
Financial reporting Financial statements are prepared on the day the accounts are closed and on any other day for which a balance sheet is drawn up, using rules of valuation of assets and liabilities and establishing the financial result respectively.
Financial statements consist of:
- balance sheet,
- profit and loss account,
- additional information, including an introduction to the financial statement and additional information and explanations.
In addition, financial statements of units subject to audit include:
- statement of changes in equity,
- cash flow statement.
An entity that did not achieve two of the following three criteria in the financial year for which it is preparing a financial statement as well as in the year preceding that financial year:
- average annual full-time employment of at least 50 people;
- total balance sheet assets at the end of the financial year did not exceed PLN equivalent of €2 million;
- net revenues from sales of goods and products and from financial operations did not exceed PLN equivalent of €4 million.
can prepare a financial statement in a simplified form, providing information as set out in Roman letters and numerals in Annex 1 to the Accountancy Act. Additional information is prepared in a simplified form. Accordingly, additional information is prepared in a simplified form.
Storage and submission of documents as well as audit, announcement and publication
Approved annual financial statements are permanently stored.
Other data sets are stored for at least:
- books of account: 5 years;
- payslips or their equivalent: for a period during which access to this information is required in accordance with the retirement and disability benefit regulations; for 50 years from the time that the insured stops working for a given employer; and in accordance with tax regulations, but for no less than 5 years;
- accounting documents confirming receipts from retail sales: until the day the financial statement for a given financial year is approved, but not prior to the day that the persons to whom the assets included in retail sales were entrusted are appraised;
- accounting documents regarding long-term investments, loans, credits, sales agreements and claims pursued in civil, criminal or tax proceedings: for 5 years from the beginning of the year that follows the financial year in which operations, transactions and proceedings are finalised, paid, settled or become outdated;
- documentation of the method of accounting: for no less than 5 years from the date it becomes invalid;
- documents regarding warranties and complaints: for 1 year from the expiry of a warranty or the settlement of a complaint;
- stocktaking records: 5 years;
- other accounting records and documents: 5 years.
The period of storage of these data sets is calculated from the beginning of the year that follows the financial year to which the given data sets refer.
A manager within an entity submits to the appropriate court register:
- annual financial statements;
- an opinion from an auditor if the statement was subject to audit;
- a copy of a resolution or a decision from an approval body on the approval of the annual financial report, the distribution of profit and the coverage of loss;
- a report on operations (in the case of limited companies, limited joint-stock partnerships, mutual insurance companies, mutual reinsurance companies, co-operatives and state companies)
within 15 days from the date of approval of an annual financial statement.
A manager within an entity preparing a simplified financial statement instead of an auditor’s opinion informs the court register about the type of opinion and states if it contains additional explanations.
In addition, a manager within an entity subject to audit is required to submit for publication:
- an introduction to the financial statement, as part of additional information,
- a balance sheet,
- a profit and loss account,
- a statement of changes in equity, and
- a cash flow statement for the financial year
within 15 days from their approval together with an auditor's report and a copy of a resolution or a decision of an approval body on the approval of an annual financial statement, the distribution of profit and the coverage of loss.
These documents are published in the Polish Official Journal "Monitor Polski B" and in the case of co-operatives in the "Monitor Spółdzielczy".
Check also the legislation on this topic in: