A company’s annual accounts should explain its business in numbers that an owner, bank or investor can follow. Our Tbilisi team prepares the year-end records, financial statements and SARAS submission as one connected job.
Annual accounts and tax returns answer different questions
The Revenue Service receives returns for particular taxes. SARAS receives the financial reporting required under the Law on Accounting, Reporting and Audit. Filing VAT, payroll or distributed-profit returns does not produce the company’s annual financial statements. Those statements bring assets, liabilities, income, expenses and equity into one consistent account.
Begin with the legal entity, reporting year and opening balances. A company with little activity can still have share capital, bank fees, director balances or loans to account for. A business with significant turnover needs the same foundations, together with reliable customer, supplier and asset records.
Find the reporting category before choosing the forms
The categories use three measures: total assets, revenue and average employees. At least two of the three criteria determine the size assessment. Apply the definitions and exclusions in the law, rather than choosing a category from turnover alone. Public-interest and regulated entities also need their specific requirements checked.
| Category | Total assets | Revenue | Average employees |
|---|---|---|---|
| IV | Up to 1 million GEL | Up to 2 million GEL | Up to 10 |
| III, excluding category IV | Up to 10 million GEL | Up to 20 million GEL | Up to 50 |
| II, excluding categories III and IV | Up to 50 million GEL | Up to 100 million GEL | Up to 250 |
| I | Above 50 million GEL | Above 100 million GEL | Above 250 |
The category assessment uses at least two criteria. The law also addresses changes over two consecutive reporting periods and an immediate change where the size increases by two or more categories. Keep the classification calculation in the year-end file, including the prior-year figures and any relevant group information.
| Entity | Financial reporting framework | General audit position |
|---|---|---|
| Public-interest entity or category I | Full IFRS | Statutory audit required |
| Category II | IFRS for SMEs, with full IFRS available | Statutory audit required |
| Category III | IFRS for SMEs, with full IFRS available | Audit requirements arise from a specific law, regulator or agreement |
| Category IV | SARAS simplified standard; a permitted higher framework may be chosen | Audit requirements arise from a specific law, regulator or agreement |
Close the records before drafting the statements
A year-end close is a sequence of reconciliations. Each material balance should have a clear source: the bank, customer ledger, supplier statement, asset register, loan agreement or tax account. An unexplained number should be resolved before it is carried into the statements.
Ask the accountant to distinguish a missing document from a proposed accounting adjustment. A missing invoice calls for evidence; an adjustment may call for a calculation or a judgement under the reporting standard. Keeping that distinction visible helps the owner approve the accounts intelligently.
| Area | Records to collect | What to reconcile |
|---|---|---|
| Bank and cash | Full-year statements, closing balances and cash records | Ledger balances, outstanding payments and foreign currency |
| Sales and receivables | Invoices, contracts, credit notes and customer balances | Revenue, receipts, advances and overdue debts |
| Purchases and liabilities | Supplier invoices, contracts and statements | Costs, unpaid invoices and accruals |
| Assets | Purchase records, disposals and fixed-asset register | Ownership, depreciation and closing values |
| Payroll | Payroll register, employment changes and payments | Salary costs, tax, pension and amounts outstanding |
| Owners and finance | Capital decisions, loan agreements and repayment records | Equity, interest and amounts owed to or by owners |
| Taxes | Returns, Revenue Service account and reconciliations | Declared amounts, payments and accounting balances |
Prepare a complete set of statements
The required presentation follows the chosen framework. The file ordinarily needs a statement of financial position, the statements explaining performance and changes in equity, and the notes required by that framework. Cash-flow presentation and other disclosures follow the applicable standard. Comparative figures should agree with the previous reporting period.
The notes explain the business, significant accounting policies and material balances. They should help a reader understand the company, rather than repeat a generic template. For example, a shareholder loan note should agree with the actual currency, maturity, balance and relationship shown in the accounting file.
Management and group reports belong in the same plan
Public-interest entities and category I and II enterprises must also prepare management reporting under the law. A parent company should assess the consolidated reporting requirements and group category using the relevant consolidation rules. Identify these reports at the start of the closing timetable so the financial statements, management information and audit work are prepared together.
Work backwards from 1 October
For a calendar-year reporting period, submit the required reports as soon as available and no later than 1 October of the following year. The ordinary deadline for 2025 statements was 1 October 2026. For 2026 accounts, plan the closing, approvals and submission around the corresponding 2027 deadline under the current rules. A non-calendar reporting period has a separate maximum nine-month submission period after its end.
Give the statutory auditor time to work where an audit is required. The accounting team prepares the records and statements; the registered independent auditor performs the audit and issues the opinion. Resolving balances at the start of that process is more efficient than rebuilding them after the draft report.
| Stage | Work to complete | Evidence to retain |
|---|---|---|
| Close | Reconcile balances and approve adjustments | Working papers and supporting records |
| Prepare | Draft statements and notes under the correct standard | Version-controlled reporting package |
| Review | Management review and audit where required | Approvals, audit communication and final report |
| Submit | Complete the SARAS reporting process | Submitted version and electronic acknowledgement |
| Follow up | Resolve any filing or content query | Correspondence and corrected version where applicable |
A handover should include the financial history
When changing accountants or acquiring a company, request the accounting export, closing trial balance, financial statements, asset register, tax returns and submission acknowledgements. Agree the date from which the new team takes over and identify work still outstanding. This prevents the same opening balance from being reconstructed repeatedly.
Keep the reporting file accessible after submission. The financial reporting law generally requires financial statements and accounting documents to be retained for six years after the relevant accounting period. An owner should be able to retrieve the exact submitted version and the records supporting it.
Small Business Status is a different classification
The tax status used by an individual entrepreneur and the financial reporting categories serve different purposes. Individual entrepreneurs fall within the reporting-law entity definition when the specified larger-category criteria are met. The analysis begins with the legal form and statutory criteria, then addresses any company or individual reporting obligation separately.
Prepare the annual accounts with a clear document plan
Send the company ID, reporting year, last trial balance and previous SARAS submission. Kristine and the team can organise the closing work, identify missing records and prepare the reporting package.
Request a consultationFrequently asked questions
Are annual financial statements the same as monthly tax returns?
Annual financial statements describe the company’s financial position and performance under its reporting framework. Monthly tax returns calculate and report particular tax obligations. Both should reconcile with the accounting records.
What should I obtain when changing accountants?
Request the accounting export, trial balance, financial statements, tax returns, bank reconciliations, asset and loan schedules, and submission acknowledgements. Agree the handover date and the closing balances.
What determines a company’s SARAS category?
The law uses assets, revenue and average employees, with at least two criteria determining the size assessment. Prior-year changes, group information and regulated status also form part of the review.
Does a year without sales still need accounting work?
The closing file should still account for capital, loans, fees, assets and other balances. Review the company’s financial reporting obligation and prepare the records supporting its position.
Legal basis: Law of Georgia on Accounting, Reporting and Audit, including Articles 2, 3, 4, 6, 7 and 9; the applicable SARAS reporting standard.