Autor: Nermin Sefić
Nermin Sefić analyses Croatian financial statement standards, deadlines, and practical analysis methods for 2026.
Overview of the balance sheet, profit and loss statement, cash flow statement, and notes to financial statements in Croatia — standards, deadlines, and practical analysis for 2026.
Financial statements are a set of structured documents showing a company's financial position and business results at a given date or over a given period. Every company in Croatia that keeps business records is required to prepare them according to prescribed rules, and the main financial statements include the balance sheet, the profit and loss statement, the cash flow statement, the statement of changes in equity, and the notes, prepared under HSFI or IFRS standards.
The filing deadline is 30 April of the current year for the previous business year, and statements are submitted through the RGFI service operated by FINA. This isn't just a formal obligation: analysts, banks, investors, and business partners use these documents to assess creditworthiness and make decisions about cooperation or investment.
The Financial Reporting Standards Board develops and adapts the HSFI standards applied in Croatia, while IFRS is issued by the IASB at the international level. Companies such as Podravka d.d. apply IFRS as adopted by the European Union for their unaudited, non-consolidated statements.
Availability of statements through the RGFI service means any interested user can review the publicly disclosed financial data of Croatian companies. This is particularly useful when analysing business partners or researching the market.
The balance sheet is a static statement because it shows the position on one specific day. Assets comprise non-current assets (real estate, equipment, intangible assets) and current assets (inventory, receivables, cash). Liabilities show the sources of financing: equity, long-term and short-term liabilities.
Key rule: assets must always equal liabilities plus equity. If they don't, there's an error somewhere in the bookkeeping.
This statement shows revenues and expenses for a given accounting period and the operating result. Operating revenue includes revenue from the sale of goods or services, while non-operating revenue can include interest, exchange-rate differences, or revenue from asset sales. Expenses are divided into material costs, wages, depreciation, interest, and other operating costs.
Many analysts consider this statement the most honest mirror of a business. A company can report a profit in the profit and loss statement while simultaneously having serious liquidity problems if customers pay late. The cash flow statement is divided into three categories of activity:
In the period 1–12/2025, Podravka d.d. achieved a net cash flow from operating activities of a positive €35.5 million, while net cash flow from investing activities was a negative €287.6 million, mostly due to the acquisition of Fortenova Group's agricultural companies.
This statement tracks all changes in equity throughout the year: profit or loss shown in the profit and loss statement, dividend payments, capital increases, and revaluation reserves. It's useful for understanding how ownership structure changes and how much profit is retained in the company versus paid out to owners.
“All these statements are interconnected and refer to one another. Viewed together, in their mutual interaction, they speak to a company's state of health, and establishing and understanding that state means having the ability to make appropriate and rational business decisions.” (Group of authors, ed. Lajoš, Ž., 2008.)
Professional advice: Correct recording of financial transactions is the foundation of accurate statements. Sales revenue is recorded on account 7000 (sales revenue) and account 1200 (trade receivables), while wage costs are recorded on account 4000 with a credit to account 1000 (bank). A bookkeeping error carries directly through into every statement.
Croatian companies choose their accounting framework based on entity size and type. Micro and small companies apply HSFI, which is adapted to domestic legislation and somewhat simpler than IFRS. Medium and large companies, as well as those whose securities are traded on a regulated market, are required to apply IFRS. Preparing financial statements under IFRS is more demanding because the IASB issues new standards and amendments every year that can significantly affect the complete financial statements.
The Accounting Act classifies businesses as micro, small, medium, or large based on revenue, assets, and employee-count criteria. Micro entities have the smallest scope of mandatory statements, while large companies must also attach an audit report. Medium-sized companies fall in between: they apply HSFI but have broader disclosure obligations than micro entities.
Since 1 January 2023, the official currency in the Republic of Croatia has been the euro, meaning all financial statements are expressed in euros. The fixed conversion rate was 7.53450 kuna per euro. Older sample notes available online are expressed in kuna and serve only as illustrative material. Currency alignment of statements following Croatia's eurozone entry significantly affects the presentation of financial data and its international comparability.
Professional advice: There's no universal financial statement template that fits every company. Management is ultimately responsible for the truthfulness of the presentation, and experts advise a substantive review of the balance sheet rather than simply relying on ready-made templates. Adapting statements to a company's specific transactions and activity isn't optional, it's an obligation.
Auditors in Croatia most often find the following shortcomings when statements are prepared:
Financial statement analysis isn't just an accounting routine. It's a tool managers, investors, and analysts use to assess a company's financial health, identify risks, and make strategic decisions. The three key analysis methods are horizontal analysis, vertical analysis, and financial ratio analysis.
Horizontal analysis compares the same line items across two or more accounting periods. If sales revenue grows year over year, that can indicate a successful sales strategy. If expenses grow faster than revenue, that's a warning sign, regardless of whether the company still reports a profit.
Example: a company achieved revenue of €400,000 in 2023 and €480,000 in 2024. That's growth of 20%. At the same time, personnel costs rose from €100,000 to €140,000, growth of 40%. That mismatch requires an explanation.
Vertical analysis shows each line item as a percentage of the total. In the profit and loss statement, every expense item is expressed as a share of total revenue, which allows comparison between companies of different sizes or across different years without the influence of absolute amounts.
Financial ratios measure key aspects of a business and are divided into four groups:
Professional analysts use vertical and horizontal analysis to detect abnormalities in time, such as unusual inventory growth or a sudden drop in liquidity, enabling a timely response.
The assumption that the profit and loss statement is the most important statement is a common mistake. That kind of thinking results in insufficient attention to capital structure and cash flow, which can lead to serious gaps in assessing the real financial position. A company can report solid profit while simultaneously having a shortage of net working capital causing illiquidity. Understanding the connection between the balance sheet, the profit and loss statement, and the cash flow statement allows for more precise interpretation of results.
For companies with subsidiaries, reviewing consolidated statements is essential for a complete picture. Non-consolidated statements often hide real financial risks that exist at the group level.
Professional advice: Use the results of financial statement analysis for strategic business decisions, not just as accounting reporting. If the analysis shows that storage costs make up a significant share of total expenses, that's a concrete point for reviewing logistics, not just a note in the annual report.
Notes are a mandatory and equal part of the financial statements, not an appendix written at the end. They provide context that the numbers alone can't give: asset valuation methods, going-concern plans, credit-line terms, and everything else needed to understand what stands behind individual line items.
The financial statements of XYZ d.o.o. for a given year are included in the consolidated financial statements prepared by the parent company, which are publicly available through FINA's RGFI service. Such a note immediately tells an analyst that, for the complete picture, they must look at the consolidated data, not just the non-consolidated statements of that one company.
The transition to the euro in 2023 required a specific note on the applied fixed conversion rate of 7.53450 kuna per euro, as well as on how comparative data for the previous year was restated. Companies that omitted this had problems during audits.
Professional advice: The notes are the first document an experienced analyst or auditor reads, not the last. Investors and banks use them to assess creditworthiness, and inadequate notes immediately signal that management doesn't fully understand what it's disclosing. Give them the same attention as the statement tables themselves.
Banks and investors use the notes to verify information not visible from the tables alone. The real-estate valuation method can drastically affect the value of assets, and without the note an analyst doesn't know whether assets are stated at historical cost or a revalued amount. The same applies to inventory: the FIFO method and the average-cost method produce different results when prices change, which directly affects reported profit.
Gnk-asg is a corporate portal that integrates the presentation of financial statements, technology solutions, and market information within the international sports and technology group GNK DINAMO Ltd. The portal publishes detailed financial indicators for the 2025 business year, including revenue of €504 million, along with analyses of capital and liabilities, illustrating how transparent financial reporting works in practice for business partners and investors.
Visit the Gnk-asg portal for insight into corporate financial data and examples of how financial reporting is applied in the real business environment of the sports and technology industry.
Financial statements in Croatia must be prepared under HSFI or IFRS standards, filed by 30 April through FINA's RGFI service, and analysing all five statements together is the only reliable way to assess a company's financial health.
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Autor i urednička odgovornost: Nermin Sefić. Izdavač: GNK ASG d.o.o..
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