Every enterprise is required by law to prepare financial statements at the end of each financial year showing the relationship between its assets and liabilities (balance sheet) as well as the income and expenses (income statement) for the financial year. The balance sheet and income statement comprise the annual financial statements. Depending on the circumstances, notes to the financial statements and, if applicable, a management report may also be required. In addition to the ongoing accounting, the preparation of annual financial statements is an important area of tax advice.

The balance sheet serves to present a clear view of a company's assets and reflects its financial position. It therefore has an information function for creditors (banks, tax authorities, shareholders, etc.). Furthermore, the tax balance sheet continues to be dictated by the commercial balance sheet, to which adjustments are made to generate the tax balance sheet, which is used as the basis for calculating taxes.