Pursuant to the Accounting Act (Official Gazette of Montenegro no. 145/21 of 31 December 2021), micro and small legal entities are required to submit to the Tax Administration:
- Balance sheet
- Income statement
- Simplified notes
- Statistical annex
What do the notes contain?
The notes contain:
- Descriptions and/or a more detailed breakdown of the amounts presented in the Statement of Financial Position (balance sheet), Income Statement, Cash Flow Statement and Statement of Changes in Equity
- Additional information not shown in the aforementioned financial statements
The additional information is required by:
- International Financial Reporting Standards (IFRS), or
- The 2021 Regulation on the Content and Form of the Templates of financial statements
11 mandatory items in the notes
All entities subject to this regulation must disclose the following in the notes:
- General information about the legal entity — registered office, legal form, description of the nature of the business and principal activities, name of the parent entity and the ultimate owner, average number of employees during the reporting period
- Information on compliance with national regulations and IFRS
- Corrections of the opening balance due to errors and changes in accounting policies
- Measurement bases of positions used in the preparation of the financial statements
- Accounting policies selected and applied to significant transactions and events
6. For fixed assets measured using the revaluation model
- Changes in the revaluation reserve during the reporting period, with an explanation of the tax treatment of the included items
- Carrying amount in the Statement of Financial Position that would have been recognised had the assets not been revalued
7. For financial instruments measured at fair value
- Significant assumptions that served as a basis for the valuation methods and techniques (when fair values were determined using one of the permitted estimation methods)
- For each category of financial instrument or asset: fair value, changes included in the Statement of Comprehensive Income, changes included in unrealised gains/losses within equity
- For derivative financial instruments: amount and nature of the instruments, including terms and conditions that may affect the amount, timing and certainty of future cash flows
- A table showing the movement of revaluation reserves and unrealised gains and losses within equity during the reporting period
8. Items that did not qualify for recognition
Items significant for the assessment of financial position and performance, including the total amount of all financial liabilities, guarantees or contingent expenditures not included in the balance sheet — as well as the nature and form of any significant guarantee given.
Note: obligations relating to pensions and to related legal entities or entities linked by participation are disclosed separately from other obligations of the same nature.
9. Advances and loans to management
The amount of advances and loans granted to members of administrative, management and supervisory bodies — indicating:
- Interest rates
- Main terms
- All amounts repaid, written off or waived
- Commitments agreed in their favour through any guarantees
10. Material income and expenses
The amount and nature of individual income or expense items that are material by amount and nature.
11. Long-term debts and guarantees
Amounts owed by the legal entity falling due more than five years later, as well as the total debts of the legal entity covered by guarantees (pledges, mortgages) provided by the legal entity — with an indication of the nature and form of the security.
Do you need expert advice on preparing the notes to the financial statements? Contact Finance Plus.
