Reporting results

Assets and liabilities, profits or losses are listed in financial statements. The two main types of financial statements are the balance sheet and the income statement {profit and loss account).

The balance sheet lists a firm's assets, liabilities and owners' equity at a point of time.

Firms in a good situation are said to have a strong balance sheet and those that are not, a weak one.

Things that are not shown in the balance sheet but in a footnote, for example, are off-balance sheet.

A company's balance sheet may include provisions for potential losses, such as bad debts, debts that may never be paid. If it looks almost certain that a debt will not be paid, it is considered a write-off and written off.

Provisions are liabilities, the amount of which cannot be established precisely, or the occurrence of which is uncertain. Provisions should be distinguished from reserves, which are amounts set aside under equity for future use with respect to obligations which may arise from probable or possible events.

A company's financial performance for a period is its results, which it reports in the form of a profit and loss account, indicating, unsurprisingly, whether it has made a profit or a loss. The equivalent document in the US is the income statement. A pre-tax profit or loss is one calculated before tax is taken into account.

The accuracy of accounts such as the balance sheet and the profit and loss account is checked and supposedly guaranteed by auditors, outside accountants who specialize in this.

When a company's accounts are presented in a way that makes performance look better than it really is, the company may be accused of window dressing or creative accounting.

The bottom line is an informal way of talking about the results of a company: the so-called bottom line of the profit and loss account. The bottom line also means the final result or the most important aspect of something.

Financial Statements

PROFIT AND LOSS ACCOUNT

in euros 2009 2008

Income

Income from affiliate companies

Interest from affiliate companies

Other interest

Other income

Total income

Less

Expenses and provisions:

General and miscellaneous expenses

Expenses on issue and sale of shares

Interest on bonds

Swiss taxes

Depreciation or participations, loans, trademark and other industrial property rights

Provision for uninsured rights

Total expenses and provisions

Net profit for the year

BALANCE SHEET at 31 December 2009

in euros 2009 2008

Assets

Cash

Affiliated company debtors

Current accounts

Less provision for income not currently collectable

Total affiliated company debtors

Sundry debtors

Bank deposit (reissue of reserved shares)

Participations in and loans to affiliated companies

Trademark and other industrial property rights

Fixed assets

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