Condensed Annual Financial Statement (ital.: Bilancio abbreviato)

Q: Condensed Annual Financial Statement (ital.: Bilancio abbreviato)

The condensed annual financial statement (bilancio in forma abbreviata) allows smaller corporations in Italy to prepare their annual financial statements using simplified presentation requirements. The purpose of this regulation is to reduce administrative burdens. The requirements and simplifications are set forth in Article 2435-bis of the Italian Civil Code (Codice civile) . Requirements for a condensed annual financial statement This option may be used if the company does not exceed at least two of the following three thresholds in its first financial year or in two consecutive financial years: Balance sheet total: 5.5 million euros Revenues from sales and services: 11 million euros Average number of employees: 50 employees What simplifications do the condensed annual financial statements offer? Compared to the ordinary annual financial statement ( bilancio ordinario ), the condensed annual financial statements provide for various simplifications: simplified presentation of the balance sheet and the income statement, profit and loss statement, aggregation of certain balance sheet items, reduced disclosures in the notes to the financial statements ( nota integrativa ), and the omission of the cash flow statement (r endiconto finanziario ). In addition, under certain conditions, the management report ( relazione sulla gestione ) may be omitted if the information required by law is already included in the notes to the financial statements.

Question

Accepted Answer

The condensed annual financial statement (bilancio in forma abbreviata) allows smaller corporations in Italy to prepare their annual financial statements using simplified presentation requirements. The purpose of this regulation is to reduce administrative burdens. The requirements and simplifications are set forth in Article 2435-bis of the Italian Civil Code (Codice civile).

Requirements for a condensed annual financial statement

This option may be used if the company does not exceed at least two of the following three thresholds in its first financial year or in two consecutive financial years:

Balance sheet total: 5.5 million euros
Revenues from sales and services: 11 million euros
Average number of employees: 50 employees

What simplifications do the condensed annual financial statements offer?

Compared to the ordinary annual financial statement (bilancio ordinario), the condensed annual financial statements provide for various simplifications:

simplified presentation of the balance sheet and the income statement, profit and loss statement,
aggregation of certain balance sheet items,
reduced disclosures in the notes to the financial statements (nota integrativa),
and the omission of the cash flow statement (rendiconto finanziario).

In addition, under certain conditions, the management report (relazione sulla gestione) may be omitted if the information required by law is already included in the notes to the financial statements.