Financial report of private and public entity - how Polish law increases reporting requirements o quoted companies?
Poland as a member of the European Union requires form publicly quoted companies (public companies, public traded companies, public held companies or public limited company – według Wikipedii ;]) to present their reports on the basis of IFRS. International Financial Reporting Standards were introduced to standardize accounting regulations around Europe. The process of unification is very difficult to be completed, that is why there are still differences among financial reporting standards in countries.
In Poland the main document regulating accounting standard is Polish Act on Accounting. Publicly quoted companies have much higher reporting requirements than private ones.
According to Ordinance of the Ministers’ Board 19 Feb.2009 and Polish Act on Accounting publicly quoted companies are required to publish:
Confidential information (Informacja poufna)
Current report (operating statement)
Quarterly report
Semi-annual report
Annual report
Public companies are obliged to present those statements in order to keep transparency towards its stakeholders. It is extremely important, as it helps to evaluate risk of the investment, performance of the company and prediction of future benefits.
Confidential information, according to article 154 Act on Trading in Financial Instruments, regards the issuer and issued instruments, that, when published, have possible influence on the price of issued securities. It is needed to be published, so to avoid a situation of ‘inside trading’, which is harmful for free market.
Current report (operating statement) is prepared no later than 24 hours after the event has occurred. It is mentioned in Board of Ministry regulation from 19.02.2009 Chapter 2, § 5, and consists of important information connected to issuer and relevant assets. It deals mainly with liquidation announcements, changes in the Board of Management or changes in companies’ rating.
Quarterly reports are in the short form and are not required to be checked by any external institutions. The report should be published not later than 45 days after the end of regarded quarter. According to chapter 4, §87 it should consist of comparable data in: Balance Sheet, Profit and Loss Statement, Cash Flow Statement and Statement of Changes in Equity. Reports are prepared after first, third and last quarter of financial year.
Semi-annual reports are presented in a short form after the first half of the financial year. They should be verified by an auditor.
Annual report is described in chapter 4 §91 and has to be verified by an entity entitled to examine financial statements. It contains a letter to shareholders with the most important achievements and failures of the issuer (company?), annual financial statement, management report, management pronouncement, auditor’s opinion and eventual changes of measurement methods. All presented data should necessarily be comparable to avoid misjudgments. (z czym?)