The financial statements, commonly referred to as annual reports, contain essential information for business owners and management. Although accountants generally use the term financial statements (FS), the meaning is the same: these reports summarize the company’s financial performance and position for the completed financial year. Because they provide critical insights and serve as a mandatory compliance requirement, it is important to understand how they work and what they must include.
The usual deadline for approving and publishing annual reports is the end of the 5th month following the financial year. For companies operating on a calendar year, this means 31 May remains the practical annual deadline. From 1 January 2025, stricter publication rules apply: any party may initiate legality supervision if statements are missing.
How does it work in Hungary?
Most companies in Hungary prepare simplified financial statements, which include the following elements:
- profit and loss statement
- balance sheet
- additional notes
From 2025: simplified account thresholds increased — balance sheet limit HUF 2B, revenue HUF 4B.
Profit and loss statement
The P&L presents all revenues, expenses, and costs recorded during the financial year, generally expressed in thousand HUF (eFt). The final result—net profit or loss—shows the company’s performance for the given period.
Balance sheet
The balance sheet provides a snapshot of the company’s assets, liabilities, and equity at the end of the financial year. It consists of two sides that must balance: the assets on one side, and equity plus liabilities on the other. The net profit or loss from the P&L is also reflected within equity.
Additional Notes
The Additional Notes section includes supplementary information required by Hungary’s Accounting Act. It gives deeper explanations of figures in the P&L and balance sheet, as well as statistical and operational details such as headcount, management-related payments, and specific disclosures not included in the core statements.
Business report
Companies that exceed the thresholds for simplified reporting must also prepare a Business Report. This document describes the company’s operations in more detail, covering areas such as employment policy, research and development, environmental responsibility, planned investments, and risk management. It provides important non‑financial context that complements the financial statements.
Audit report
If the company is required to undergo a statutory audit, the resulting Audit Report must be published together with the annual financial statements. The audit confirms whether the financial statements present a true and fair view of the company’s financial position and performance.
Owners’ resolution
The complete financial statement package must be approved or, in rare cases, rejected by the owners. Depending on the company’s structure, this may be done by the general assembly or a single shareholder. During this approval process, the owners must also decide how to allocate the profit, typically by choosing whether to distribute dividends or transfer the profit to retained earnings. The approved resolutions become part of the reporting package and must be published along with the financial statements.
Only approved financial statements may be submitted; approval delays may block submission.
What to do with them?
Financial statements must be officially prepared in Hungarian. However, we also prepare English versions for clients, except for the Additional Notes, which must remain in Hungarian due to legal and technical requirements.
Once finalized, the signed financial statements must be retained by the company. We upload all required data such as the P&L, balance sheet, and associated PDF documents, to the Ministry of Justice’s electronic filing system. This ensures compliance with Hungary’s mandatory publication and submission rules.
Submission must be done via the OBR system and requires a valid Client Gateway or DAP address.
Penalties updated: first notice 30 days, second notice HUF 200,000 fine, final step tax number deletion.
If you’re looking for a reliable accounting partner in Hungary who can manage the preparation and submission of your financial statements, our team is ready to help.
