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Vorozhbitova Krystyna

Chief Accountant

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Chief Accountant Kristina Vorozhbitova on the management report

This is a new Report, which for the first time must be submitted together with the financial statements for 2018. Management report – a document containing financial and non-financial information that characterizes the state and prospects of the enterprise and reveals the main risks and uncertainties of its activities.

The category of micro and small enterprises does not submit a management report, and medium and large enterprises need to submit a report, while medium-sized enterprises can not provide non-financial information.

The form of the Management Report is developed by the enterprise independently (there is no form). But there are Methodological Recommendations of the Ministry of Finance on the preparation of this Report (approved by the order of the Ministry of Finance dated 07.12.2018 № 982).

The Report is submitted together with the annual financial statements, and, as provided for in Part 7 of Art. 11 of the Law on Accounting, submitted in the manner and terms established for annual reporting. That is, formally it must be submitted to the same users to whom the financial statements are submitted, and at the same time.

But! It should be noted that there is no electronic form of this Report. It is not in the list of tax forms or in the list of statistical reporting forms that can be submitted electronically. You cannot submit a Management Report electronically.

At the same time, the tax authorities do not need this Report by and large. It is important to note that this Report is not in itself part of the financial statements. And since this is not a financial statement, then it is not an appendix to the tax return. Accordingly, there will be no problems with the acceptance of the income tax return due to the fact that the Management Report will not be submitted to the tax authorities.

As for statistics, this Report should be formally submitted to the statistics. But again, there is no electronic form of this Report, and it is not in the list of statistical forms of reports either. Therefore, in principle, it should be submitted to the statistics, if it needs it.

But there is an important point for those companies whose financial statements for 2018 are subject to disclosure orders to publish on the website of such companies not only financial statements but also the Management Report. At the same time, as we mentioned above, a significant administrative fine is provided for violation of the procedure for publishing financial statements. The question here is: can its publication without the Management Report be considered a violation of the procedure for publishing financial legitimacy? There is reason to believe so. Therefore, companies that are required to publish financial statements for 2018, it is better not to take risks and publish the Management Report together with the annual financial statements on their official website.

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