Period-end procedures: counts, reconciliations and a closing checklist
A year-end closing checklist for companies keeping balance-sheet books: counts, reconciliations, valuation entries, accruals and checks before the return.
The corporate tax return is filed in April, but the foundation of a correct return is laid on 31 December. This article presents the year-end closing as a checklist in calendar order.
In December: preparation
- Has the list of fixed assets bought and sold during the year been updated?
- Have old unpaid or uncollected invoices been sorted out?
- Have the count day, the count team and the count form been set?
- Has the opening certification of next year's books or the e-Ledger certificate schedule been planned?
31 December: counts
Cash count. The cash actually in the till is compared with the recorded cash balance. If the records show a high cash balance but there is no money in the till, this may be treated like a loan to a shareholder and carries tax risk.
Stock count. Quantities of goods, raw materials, work in progress and finished goods are counted; the count record is signed. Valuation is made with the chosen cost method: Inventory valuation
Fixed asset count. Fixed assets that are recorded but no longer exist or are unusable are identified; disposal is documented.
Reconciliations
| Reconciliation | How |
|---|---|
| Bank | Each account's year-end statement is compared with the books |
| Customers and suppliers | A written confirmation letter for significant accounts |
| Credit cards | Comparing statements with the records |
| Shareholder current account | Balance and interest calculation: Shareholder current account |
| SGK and tax | Taxes and SGK debts payable and accruals |
Differences found in reconciliations should be resolved before the closing entries.
Valuation and adjustment entries
- FX revaluation: foreign-currency cash, bank accounts, receivables and payables are valued at the CBRT foreign exchange buying rate: FX revaluation · Period-end rates
- Rediscount: rediscount can be applied to receivables and payables in the form of notes: Rediscount
- Depreciation: annual depreciation is recorded: Depreciation methods
- Doubtful receivables: a provision is made for receivables in litigation or enforcement: Doubtful and worthless receivables
- Accruals: expenses incurred by year end but not yet invoiced (rent, electricity, interest) and prepayments relating to future years are separated.
- Severance pay: for tax purposes the provision cannot be expensed; in the commercial balance sheet it can be calculated under TFRS.
Before the tax calculation
- Non-deductible expenses are listed one by one: List of non-deductible expenses
- Prior-year losses and the periods in which they can be offset are checked: Loss carry-forward
- The minimum corporate tax comparison is made: Domestic minimum corporate tax
- Provisional taxes paid during the year are listed for offset.
After closing
- It is checked that e-Ledger certificates were uploaded on time: e-Ledger certificate deadlines
- The financial statements are presented to the shareholders and, if required, to the independent auditor.
- Preparations are made for the ordinary general meeting: General meeting
- Corporate tax return: Checklist for April
Our related service: Tax returns
Legal basis: Tax Procedure Law No. 213 arts. 185–188 (inventory), 258–290 (valuation); Turkish Commercial Code No. 6102 arts. 64–88.