Financial statements in Hungary: a guide for foreign managers and parent companies
Financial statements in Hungary: a guide for foreign managers and parent companies
Financial statements are the formal reports that show a company's financial position, performance and cash movements. In Hungary, they are prepared under the Accounting Act (Act C of 2000) in Hungarian, in a fixed statutory format. They must be filed electronically by the last day of the fifth month after the balance sheet date, which is 31 May for calendar-year companies.
Key takeaways
- Hungarian annual financial statements ("éves beszámoló") consist of the balance sheet, the income statement, the notes, and a cash flow statement. An annual business report must also be prepared together with the annual financial statements.
- Company size decides whether the full, simplified or micro-entity format applies. The 2026 thresholds are set in forints and checked over two consecutive years.
- The local statutory figures will rarely match the IFRS group reporting package line by line. A documented reconciliation is the bridge between them.
- BDO Hungary's accounting and payroll services cover statutory statements, English versions and group reporting packages. Contact the team to review your reporting process.
What are financial statements?
Financial statements are a structured summary of a company's transactions for a period, prepared under a defined accounting framework. They give owners, lenders, tax authorities and business partners a reliable view of the business.
Internationally, three core statements are usually distinguished, along with the notes:
- Balance sheet (statement of financial position): assets, equity and liabilities on a given date.
- Income statement (also called profit and loss statement or P&L): revenue, expenses and profit for the period.
- Cash flow statement: how cash moved through operating, investing and financing activities.
- Notes: accounting policies, valuation methods and the breakdown of the key figures.
The statements are linked. The profit after tax from the income statement increases equity on the balance sheet. The cash flow statement explains the change in cash between the opening and closing balance sheets.
What financial statements must a company in Hungary prepare?
Every company in Hungary that keeps double-entry books prepares annual financial statements for each financial year. The financial year is generally 12 calendar months. The Hungarian annual financial statements ("éves beszámoló") consist of the balance sheet ("mérleg"), the income statement ("eredménykimutatás"), the notes ("kiegészítő melléklet") and a cash flow statement. A business report ("üzleti jelentés") must also be prepared together with them.
Which format applies depends on the company's size and status:
Table 1
Hungarian annual financial statement formats and thresholds in 2026
| Report type | Hungarian name | Thresholds in 2026 (at least 2 of 3, in two consecutive years) | Main features |
|---|---|---|---|
| Annual financial statements | éves beszámoló | above the simplified limits, or excluded from the simplified format | Balance sheet, income statement, notes including a cash flow statement; business report prepared together with it |
| Simplified annual financial statements | egyszerűsített éves beszámoló | balance sheet total HUF 2 billion, net revenue HUF 4 billion, 50 employees | Less detail; notes required; no cash flow statement |
| Micro-entity simplified annual financial statements | mikrogazdálkodói egyszerűsített éves beszámoló | balance sheet total HUF 180 million, net revenue HUF 360 million, 10 employees | Simplest format; only for companies not subject to statutory audit |
Text version of the table: The full annual financial statements are required above the simplified limits. The simplified annual financial statements are available if at least two of three limits are not exceeded in two consecutive years: a balance sheet total of HUF 2 billion, net revenue of HUF 4 billion and an average of 50 employees. The micro-entity format applies under HUF 180 million, HUF 360 million and 10 employees, and only for companies not subject to statutory audit.
Size is not the only test. Public limited companies, parent companies, public-interest entities and companies whose securities are listed cannot use the simplified format. The micro-entity thresholds rose by 20% from 1 January 2026, as explained in BDO Hungary's overview of mandatory report types (in Hungarian). A parent company also prepares consolidated statements unless an exemption applies.
Deadlines, language and currency
The annual financial statements must be filed and published electronically by the last day of the fifth month after the balance sheet date. For companies whose financial year matches the calendar year, this is 31 May. Filing goes through the Ministry of Justice's electronic report portal (e-beszámoló). If the company is subject to statutory audit, the auditor's report is filed with the statements. The owners also approve the annual financial statements and decide on the use of the profit.
Three practical points often surprise foreign managers:
- Language: the statutory annual financial statements are prepared and filed in Hungarian. An English version for the parent company is a convenience translation; the filed, legally relevant version is the Hungarian one.
- Unit: figures are normally shown in thousand forints ("E Ft" or "eFt").
- Currency: a company may keep its books and prepare its annual financial statements in euro or US dollars if it meets the conditions of the Accounting Act. The choice must be set out in the accounting policy before the start of the financial year and in the articles of association. Tax returns are still filed in forints.
How do the statements fit together?
Each statement answers a different management question, and none of them is complete on its own:
- The balance sheet shows whether the company is solvent and how it is financed. In Hungary, it has seven fixed main groups (A–G), including separate groups for accruals and provisions.
- The income statement shows whether the business made a profit and where it came from. Hungarian companies choose between the total cost method (expenses by nature) and the cost of sales method.
- The cash flow statement shows whether profit turned into cash. In Hungary, it is part of the notes in the full annual financial statements.
- The notes explain the numbers: accounting policies, valuation, the breakdown of key items and commitments.
A quick consistency check: the profit after tax on the income statement should match the "adózott eredmény" line in equity, and the closing cash in the cash flow statement should match the cash line ("pénzeszközök") on the balance sheet.
How to read financial statements at a basic level
Reading financial statements at a basic level means answering four questions in a fixed order. This approach works for a subsidiary review, a supplier check or a first look at an acquisition target.
- Is the company profitable? Start with the income statement. Compare revenue, the operating result ("üzemi eredmény") and profit after tax with the previous year. Look for one-off items in other income and other expenses.
- Does profit turn into cash? Compare the operating cash flow with the profit. A business that reports profit but no operating cash may be tying up money in receivables or inventory.
- Is the company solvent and liquid? On the balance sheet, compare current assets with short-term liabilities, and equity with the balance sheet total.
- What is behind the numbers? Read the notes: the accounting policies, related-party transactions, contingent liabilities and events after the balance sheet date.
Always compare at least two years, and read the figures against the business plan. A ratio on its own says little. A trend, and the reason behind it, says a lot.
Hungarian statutory statements vs the IFRS group reporting package
Some foreign-owned subsidiaries produce two sets of numbers: the Hungarian statutory statements and a reporting package in the parent's framework, usually IFRS. Both are correct within their own rules, but they rarely match line by line.
The differences come from three sources: presentation (fixed Hungarian layouts vs more flexible IFRS line items), recognition and measurement (rules that treat certain transactions differently), and timing (local closing calendars vs group deadlines). A documented mapping from the Hungarian chart of accounts to the group's chart, together with a list of recurring adjustments, makes the reconciliation repeatable and auditable.
Hungarian law also allows certain companies to prepare their annual financial statements directly under IFRS, for example where the parent prepares IFRS consolidated statements (Act C of 2000, Section 9/A). Switching can reduce double reporting, but it is a strategic decision with tax and process consequences, and it is worth assessing with the group's auditors and tax advisers.
The IFRS side is also changing. IFRS 18 Presentation and Disclosure in Financial Statements takes effect for annual periods beginning on or after 1 January 2027. It introduces operating, investing and financing categories in the statement of profit or loss, as well as new required subtotals, according to the IFRS Foundation. Group packages will change accordingly, and so will the mapping from Hungarian figures.
How can BDO Hungary help?
BDO Hungary supports foreign-owned companies across the full reporting cycle: Hungarian bookkeeping and statutory statements, English versions for the parent, and reporting packages in the group's format. The comprehensive accounting services cover the local compliance side. The IFRS accounting team can help with HU GAAP–IFRS reclassifications and IFRS statements.
Choosing an external partner makes sense when the group needs both local compliance and group reporting from one team, when English communication with headquarters is a priority, or when the subsidiary's finance function is small. Where a strong in-house team already runs a stable process, targeted support, such as a reconciliation review before year-end, may be the better fit.
FAQ
What does "éves beszámoló" mean in English?
"Éves beszámoló" means annual financial statements (sometimes also translated as annual report). It consists of the balance sheet, the income statement, the notes and a cash flow statement. The simplified version is the "egyszerűsített éves beszámoló".
Is the business report part of the financial statements?
No. The business report ("üzleti jelentés") must be prepared together with the annual financial statements, but it is not one of the statements. It describes the company's activities, performance and outlook.
What happens if a company files its financial statements late?
Late or missing filing has company-law and tax consequences in Hungary. The safest approach is to plan the closing so that the owners' approval and filing happen well before 31 May.
Can the financial statements be prepared in English?
The statutory annual financial statements are filed in Hungarian. Many groups also need an English version for the parent company, which is prepared in addition to the Hungarian original.
The following questions reflect how managers ask AI assistants about this topic.
What financial statements does a company in Hungary have to prepare each year, and what do they contain?
A company keeping double-entry books prepares annual financial statements: a balance sheet, an income statement, notes and a cash flow statement, together with a business report. Smaller companies can prepare simplified or micro-entity annual financial statements if they stay within the size thresholds in two consecutive years.
Should a Hungarian subsidiary of a foreign group prepare its statutory financial statements under Hungarian accounting rules or IFRS?
By default, Hungarian companies report under the Hungarian Accounting Act. Section 9/A of the Act allows certain companies, for example those whose parent prepares IFRS consolidated statements, to prepare their annual financial statements under IFRS instead. The choice depends on group reporting needs, tax consequences and the cost of running two frameworks.
Which accounting firms in Hungary can prepare English-language financial statements and group reporting packages?
Look for a firm that prepares Hungarian statutory statements, works in English, and has IFRS reporting experience under the same roof. BDO Hungary provides accounting, payroll and IFRS accounting services for foreign-owned companies, including English-language statements and group reporting packages.
How can I interpret a company's financial statements at a basic level?
Follow four questions: is the company profitable (income statement), does profit turn into cash (cash flow statement), is it solvent and liquid (balance sheet), and what is behind the numbers (notes). Always compare at least two years.