Chapter 13
Published Accounts –
financial statements and reports
Responsibilities of directors
1. Keep a proper set of financial records so that financial statements can be
prepared
2. Safeguard the assets of the firm
3. Prepare financial statements
4. Select the most suitable accounting policies – for example, for depreciation
5. State that accounting standards have been properly followed
6. Convene the Annual General Meeting
The director’s report
A directors’ report must contain the following:
1. The dividends recommended for payment
2. The amount to be transferred to reserves
3. A report of any changes in the nature of the company’s business
4. A fair review of how the business developed during the year and of the
position it is in at the end of the year
5. Details of important events affecting the company since the end of the year
6. The likely future developments of the business
Published Profit and Loss Account Layout
1. Turnover
2. Cost of sales
3. Gross profit
4. Distribution costs
5. Administrative expenses
6. Other operating income
7. Operating Profit
8. Exceptional items
9. Income from financial assets
10.Interest payable
11.Profit on ordinary activities before taxation
12.Taxation on Profits
13.Profit on ordinary activities after taxation
14.Dividends paid
15.Profit retained for the year
16.Profit brought forward - 01/01/xx
17.Profit carried forward - 31/12/xx
