Provisional and projected finalcial statements

Based on the requirement of Banks the P&L A/c and Balance sheet is prepared as comparatives for 5 years or more...

First you have to prepare the audited P&L and Balance Sheet, by taking the past 2 or 3 years audited figures.

second you have to prepare the provisional P& L and Balance Sheet. Provisional represents the amount incurred till now. For eg: if sales till july is Rs.50 lacs, then your provisional P& L should have sales of Rs.50 lacs. These figures can not be guessed. You have to gather information from management based on all items in recorded in past audited P&L and Balance sheet. You have to record all items of income, expenditure, assets and liabilities as far as possible after enquiring the management.

Lastly projections..

Projections are based on industry trends. Projections varies from one business to another based on many factors like Govt Policies, reputation of the business, trend, market and economic factors etc..

Projections are prepared by making suitable estimations (reasonable increase/decrease) of Income, Expenditure, Assets and Liabilties, but all the items mentioned in audited and provisional should also be reflected in projectons except their is any disposal/ termination.

Iam attaching a proforma of projections which I found in this site itself........