Efnahagsreikningurinn

Efnahagsreikningurinn, often translated as the "economic account" or "balance sheet" in English, is a fundamental financial statement in Iceland. It provides a snapshot of a company's or entity's assets, liabilities, and equity at a specific point in time. This statement is crucial for understanding the financial health and structure of a business.

The assets section details what a company owns, categorized into current assets (like cash and accounts receivable) and non-current assets (like property, plant, and equipment). Liabilities represent what the company owes to others, divided into current liabilities (due within a year) and non-current liabilities (long-term debts). Equity, also known as net worth, represents the owners' stake in the company, calculated as assets minus liabilities.

In Iceland, as in many other countries, the efnahagsreikningurinn is a required component of annual financial reporting for most businesses. It is used by management, investors, creditors, and regulatory bodies to assess financial performance, solvency, and liquidity. The principle of double-entry bookkeeping underpins its preparation, ensuring that the fundamental accounting equation – Assets = Liabilities + Equity – always holds true. Analyzing trends in the efnahagsreikningurinn over time can reveal important insights into a company's growth, debt management, and overall financial strategy.