Financial Statements Audited for Freelancers
Financial Statements Audited for Freelancers in India typically have a simplified financial structure compared to traditional businesses, which reflects in the key financial statements audited for them.
The main financial statements audited for freelancers in India are:
◘ Income Statement:
This statement provides a summary of the freelancer’s revenues and expenses over a specific period.
Revenues include the earnings from freelance projects, while expenses encompass business-related costs such as internet, software subscriptions, and workspace expenses.
The resulting net income or loss gives a clear picture of the freelancer’s financial performance.
◘ Balance Sheet:
The balance sheet presents a snapshot of the freelancer’s financial position at a specific point in time.
It lists the freelancer’s assets (such as savings, investments, or equipment), liabilities (like outstanding debts), and owner’s equity (the residual interest in assets after deducting liabilities).
This statement shows the freelancer’s overall financial health.
◘ Cash Flow Statement:
The cash flow statement tracks the movement of cash and cash equivalents during a specific period.
It categorizes cash flows into operating activities (income and expenses directly related to freelancing), investing activities (purchases of assets or investments), and financing activities (borrowings or repayments).
This statement helps assess the freelancer’s ability to manage cash and generate future income.
It’s important to note that while some freelancers may not be legally required to undergo a full audit due to their lower revenue thresholds, having accurate and auditable financial statements can still provide credibility, assist in financial planning, and ensure compliance with taxation regulations.
Always consult with a financial advisor or tax professional to determine the specific requirements for your freelancing situation.”
To visit: https://www.incometax.gov.in
For further details access our website: https://vibrantfinserv.com
