Announcement of Annual financial statements (AFS)
General requirements for the financial statements
The financial statements must present the property and financial condition, the financial results of the activity of the enterprise, the cash flows and the owner’s equity.
Enterprises in Bulgaria draw up:
1. an annual financial statement as of 31 December of the reporting period (the calendar year – from 1 January to 31 December);
2. a consolidated financial statement as of 31 December of the reporting period when the parent company is a commercial company;
3. interim financial statements covering a period shorter than one reporting period, when required by a law or by a decision of the manager of the enterprise.
Annual financial statements (AFS)
The annual financial statement of all enterprises consists of at least a balance sheet, a profit and loss account and a note.
The annual financial statement of the sole traders, of which the amount of net income from sales for the current reporting period does not exceed 200 000 levs and is not subject to an obligatory independent financial audit, may consists only of a profit and loss account.
The annual financial statement of micro-enterprises may only consist of a condensed balance sheet and a condensed profit and loss account by sections. This rule does not apply to the investment companies and financial holding companies categorized as micro-enterprises.
The annual financial statement of small enterprises may consist of а condensed balance sheet, a condensed profit and loss account by sections and groups and a note.
The annual financial statement of medium-sized and large enterprises as well as enterprises of public interest is drawn up in a full set in accordance with the applicable accounting standards.
Consolidated financial statements
A consolidated financial statement is drawn up by a parent company by the rules and requirements of:
1. the National accounting standards - for enterprises which draw up and present their annual financial statement on the basis of the National accounting standards;
2. the International accounting standards - for enterprises which draw up and present their annual financial statement on the basis of the International accounting standards.
A consolidated financial statement is drawn up by a parent company, regardless of where the headquarters of the subsidiaries are located.
The form, structure and content of the consolidated financial statement are determined by the applicable accounting standards.
Applicable accounting standards
The annual, consolidated and interim financial statements of enterprises of public interest are drawn up on the basis of the International accounting standards.
The annual, consolidated and interim financial statements of micro-enterprises, of small, medium-sized and large enterprises are drawn up on the basis of the National accounting standards.
The annual financial statements of companies in liquidation or insolvency as well as of non-profit legal persons are drawn up on the basis of a National accounting standard.
Independent financial audit
Annual and consolidated financial statements of the following are subject to a mandatory independent financial audit by registered auditors:
1. small enterprises which as of 31 December of the current reporting period exceed at least two of the following indicators:
a) balance sheet assets - 2 000 000 levs;
b) net income from sales - 4 000 000 levs;
c) average number of personnel for the reporting period - 50;
2. medium-sized and large enterprises;
3. enterprises of public interest;
4. medium-sized and large groups and those groups in which at least one enterprise is an enterprise of public interest;
5. enterprises included in a consolidation;
6. joint-stock companies and limited partnerships with shares (if they have carried out business activity during the reporting period);
7. enterprises for which this requirement is established by a law.
Annual financial statements of non-profit legal persons designated as operating for the public benefit are subject to a mandatory independent financial audit by registered auditors when for the current year they exceed one of the following indicators:
1. balance sheet assets as of 31 December - 1 000 000 levs;
2. amount of net income from business activities and income from non-profit activities for the current year - 2 000 000 levs;
3. total amount of financing received during the current year and financing received in previous reporting periods not absorbed as of 31 December of the current year - 1 000 000 levs.
Publishing of financial statements
Enterprises publish their annual financial statements, their consolidated financial statement and their annual reports as adopted by the general meeting of shareholders or partners or by the relevant body as follows:
1. all merchants within the meaning of the Commercial Law - by filing for entry and submission for announcement in the Commercial Register within 30 June of the following year;
2. non-profit legal persons designated as operating for the public benefit - by filing for entry and submission for announcement in the Central Register of the Ministry of Justice under the terms and following the procedure set out in the Law on Non-Profit Legal Entities within 30 June of the following year (and after 01.01.2018 - in the register of the non-profit legal entities, kept by the Registry Agency);
3. the rest of enterprises - through a business publication or in the Internet within 30 June of the following year.
Administrative penal liability
Whoever is obliged and does not publish a financial statement within the above mentioned terms shall be punished with a fine in the amount of 200 to 3 000 levs and the enterprise shall be subject to a pecuniary sanction in the amount of 0.1 to 0.5 per cent of the net income from sales for the reporting period to which the unpublished financial statement refers, but not less than 200 levs. A repeated infringement shall be subject to a fine or a pecuniary sanction in a double amount.
Whoever is obliged and does not commission an independent financial audit to a registered auditor shall be punished with a fine in the amount of 500 to 5 000 levs and the enterprise shall be subject to a pecuniary sanction in the amount of 2 000 to 10 000 levs. A repeated infringement shall be subject to a fine or a pecuniary sanction in a double amount.
