Reporting deadline for the fourth category entities has been postponed

An amendment to the Law of Georgia “on Accounting, Reporting and Auditing”, approved by the Georgian Parliament, entered into effect. According to the amendment, financial reporting requirement for the fourth category entities is postponed to 2021.

In accordance with the Article 3 of the Law of Georgia “on Accounting, Reporting and Auditing”, fourth category entities must keep accounting and prepare financial statements om accordance to the Simplified Financial Reporting Standard for the Fourth Category Entities adopted by SARAS and effective since July 2, 2018.

Accordingly, despite the deferral of the reporting period, entities of the fourth category must continue using abovementioned standard for accounting and reporting purposes.   

SARAS specifies that according to the amendment to the Law, in 2021 the fourth category entities must present full set of statements of 2020.  As stipulated by the section 3 of the Standard, the full set of statements must include the following:

1. Statement of financial position for the end of the reporting period of 2020 as well as opening and closing balances for  2019 reporting period’.
2. Statement of income, expenses and undistributed profit for the periods of 2020 and 2019. 

It is worth mentioning, that despite the amendment to the Law, the fourth category entities can submit  2018 and 2019 statements on a voluntary basis which will support their access to finance and development of business relations. In particular, submitted statements, (if tick marked accordingly), will be shared with the credit information bureau registered in the National Bank of Georgia. The Bureau itself will use this and other information to develop the credit rating. The existence of such scores will simplify the relationship of the enterprises with the banks and other financial institutions. 

Furthermore, other stakeholders, upon consent of the entity, can find submitted statements on reportal.ge (The rule for getting the consent can be found in Article 22 of the rule for submission of the statements). 

Fourth category entities can submit simplified statements, only electronically, on reportal.ge. 

You can find the Standard’s self-learning manual on the following link.