Financial Reporting

The balance sheet shows the business's assets, liabilities and equity on a specific date, like a snapshot. The income statement shows the revenue earned, the expenses incurred and the resulting profit or loss over a period. Read together, they show where profit comes from and what it turns into within the business.

Profit in the income statement includes sales not yet collected. Growth in credit sales, cash tied up in inventory, loan principal repayments or capital expenditure can absorb profit before it turns into cash. The cash flow statement is the key report that explains this gap, as it shows separately which activities bring cash in and which take it out.

No. The tax balance sheet is prepared according to the valuation rules of the Tax Procedure Law and is used to determine the tax base. Companies subject to independent audit also prepare statements under the financial reporting standards set by the Public Oversight Authority (TFRS or BOBİ FRS). Companies not subject to audit generally use Tax Procedure Law based statements in practice.

Banks usually ask for the annual balance sheet and income statement for the last two or three years, statements for the latest advance tax period of the current year, the tax certificate and, where needed, the trial balance. Requirements vary by bank and loan type. Consistency between the statements and the filed returns is the first thing checked.

Statutory financial statements are prepared in the format set by law for submission to the tax office. A management report is prepared to help the owner make decisions, and its format is flexible. It can include expense breakdowns, profitability by product or customer, budget versus actual comparisons and monthly trends.