Abstract:

This report aims to acquaint readers with the methodological approaches in preparing the elements of the annual financial statements. In the present study, attention is paid to the regulatory requirements and the peculiarities of the preparation of financial statements. The report makes the necessary distinction between an "annual activity report" submitted to state institutions and an "annual financial report", which is published to meet the reporting needs of a wide range of external users. The peculiarities of the preparation of the financial statements, based on the applicable International Financial Reporting Standards and the National Financial Reporting Standards for small and medium enterprises, are considered.

An important place in the practical preparation of the elements of the financial statements is given to the accounting principles: current accrual, operating enterprise, comparability between income and expenses, prudence, preservation, if possible, of the accounting policy from the previous period. Students get acquainted with the initial information base for the preparation of financial statements, with the peculiarities of its preparation and verification, with the elements of the financial statement - balance sheet, income statement, cash flow statement, statement of equity. Special attention is paid to the problem areas in the preparation of these elements, which are also included in solving practical cases.

The prerequisites and needs for preparation of consolidated financial statements, as well as interim reports are considered.

Additional requirements accompanying the process of preparation of the annual financial statements, which may arise in connection with the occurrence of corrective events after the balance sheet date, errors detected, changes in accounting policies and accounting estimates used, are also discussed.
All issues and problems considered are linked to the applicable accounting standards, analyzing the approaches and ways to apply the relevant provisions set out in them in resolving specific cases.

In the present study, we will present practical results for using the accounting information generated by the financial statements to analyze financial risk. All examples in this report are taken from student internships used in teaching at South-West University "Neofit Rilski". Another focus of the report is the practical training of students at the Faculty of Economics of SWU and the opportunity to work with accounting information, to extract the necessary data and to formulate conclusions based on the financial statements. A major aspect of teaching at the Faculty of Economics is the relationship between practical knowledge and theory. Each student must have the necessary minimum knowledge in order to be successful in any business structure.

Keywords:

Financial risk, financial statements.