Full accounting in Poland - What is it and who does it apply to?

Definition of Full Accounting in Poland – What Is It?

Full accounting is an advanced financial record-keeping system for businesses maintained in the form of accounting books. It covers the recording of all business operations – revenues, costs, receivables, liabilities, and assets – in accordance with the Accounting Act.

Full accounting operates based on:

• Double-entry bookkeeping (each operation is recorded in two accounts);
• Preparation of balance sheets, profit and loss statements, and company financial reports;
• Complete control of cash flows and the company’s asset situation.

Mandatory Full Accounting in Poland - When and For Whom?

The provisions of the Accounting Act precisely define which business entities are required to maintain full accounting. This obligation stems from two key factors: the legal form of the business and the amount of revenue generated.

When is Full Accounting Required in Poland? Revenue Threshold

From 2025, the obligation to maintain full accounting appears when a company’s net revenue in the previous year exceeds 2.5 million EUR, which according to the National Bank of Poland exchange rate as of October 1, 2024, corresponds to 10,711,500 PLN. After exceeding this threshold, the business must maintain accounting books in accordance with the Accounting Act from the new fiscal year, even if it previously used simplified forms of record-keeping such as the Revenue and Expense Ledger or flat-rate taxation.

Full Accounting and Forms of Business Activity

The obligation for full accounting depends not only on the revenue threshold but also on the form of business activity. The necessity to maintain full accounting applies to all commercial companies, namely:

• General partnerships;
• Professional partnerships;
• Limited partnerships;
• Limited joint-stock partnerships;
• Limited liability companies;
• Simple joint-stock companies;
• Joint-stock companies.

It’s worth adding that the obligation to maintain accounting books also applies to companies that change their legal form. If a business previously maintained, for example, a revenue and expense ledger, and then transformed and was entered into the National Court Register, from that moment it is obligated to maintain financial records in the form of full accounting.

Other Entities and the Obligation to Maintain Accounting Books

Furthermore, besides the above-mentioned companies, the full accounting obligation applies to:

• Institutions conducting insurance activities;
• Budgetary units and establishments;
• Entities operating in accordance with banking law;
• Local government units (municipalities, counties, voivodeships);
• Organizations financed by grants or subsidies.

Voluntary Maintenance of Accounting Books

Regulations also allow for the voluntary maintenance of accounting in the form of accounting books, even when a company is not legally obligated to do so. Entrepreneurs anticipating exceeding the revenue limit in the coming years may decide to transition to full accounting earlier, which helps avoid sudden changes in accounting processes.

The procedure for voluntary transition requires informing the tax office before the start of the fiscal year. Formalities can be completed by introducing appropriate changes to the entry in the Central Register and Information on Economic Activity (CEIDG), without the need to submit an additional notification.

What Does a Polish Accounting Book Consist Of?

The accounting book is a fundamental element of full accounting that enables the proper recording of business operations. It consists of several parts: the journal, general ledger, subsidiary ledgers, inventory of assets and liabilities, and statements of account turnovers and balances. Each of these elements serves a separate function, ensuring completeness and transparency of accounting records.

Accounting Book Journal

The journal is part of the accounting book where all business operations are recorded in chronological order. Each entry must contain the date, accounting document number, operation description, and amount. The purpose of the journal is to ensure complete and continuous recording of financial events, which enables control of the completeness of bookings and serves as a starting point for further entries in the general ledger and subsidiary ledgers.

General Ledger

The general ledger is the central element of accounting books, where all business operations included in the journal are recorded, but in systematic order, i.e., according to accounting accounts. Each account in the general ledger represents the status and changes of assets, liabilities, costs, and revenues. This makes it possible to prepare a statement of turnovers and balances, and then prepare a financial report in accordance with the Accounting Act.

Subsidiary Ledgers

Subsidiary ledgers provide details of the general ledger entries. They are maintained for selected areas of activity, such as settlements with contractors, fixed assets, inventories, or tax settlements. They enable precise monitoring of the status and changes in individual components of assets and sources of financing. Entries in subsidiary ledgers must be consistent with the general ledger and form the basis for preparing balance statements that facilitate control of the correctness of records.

Statements: Turnovers and Balances of General Ledger Accounts and Balances of Subsidiary Ledger Accounts

Statements in full accounting serve for periodic control of the correctness of entries in accounting books. The statement of turnovers and balances of general ledger accounts presents the turnovers and statuses of individual synthetic accounts, while the statement of balances of subsidiary ledger accounts details the data in relation to analytical entries. Their consistency ensures the completeness and correctness of accounting records and forms the basis for preparing financial statements.

Inventory - List of Assets and Liabilities

The inventory is part of the accounting books presenting a detailed list of all components of assets and their sources of financing (liabilities) as of a given day, most often at the end of the fiscal year. The inventory in full accounting is prepared based on the conducted stocktaking and reflects the actual state of the entity’s possessions. Its purpose is to ensure the consistency of accounting records with the actual state, which is of key importance when preparing the opening balance and financial statements.

Principles of Full Accounting in Poland

The principles of full accounting define how accounting books are maintained in accordance with the Polish Accounting Act. The most important include:

1. The principle of double entry, i.e., recording each operation on two accounts;
2. The accrual principle, requiring the recording of costs and revenues in the period of their occurrence;
3. The prudence principle, requiring reliable valuation of assets and liabilities;
4. The continuity principle, ensuring comparability of data in subsequent periods;
5. The completeness principle, guaranteeing the inclusion of all business events.

Full Accounting vs. Simplified Accounting in Poland - What Are the Differences?

Full accounting involves maintaining accounting books in accordance with the Accounting Act, includes the principle of double entry, detailed recording of all operations, and the obligation to prepare financial statements. In contrast, simplified accounting (e.g., Revenue and Expense Ledger, flat-rate) allows for accounting for revenues and costs without requiring the maintenance of full books or a balance sheet.

Both forms of accounting thus differ in the scope of records, degree of complexity, service costs, and legal obligation, which in the case of full accounting applies to commercial companies and businesses exceeding the revenue limit.

Full Accounting in Poland - Summary

Full accounting is the most detailed form of financial record-keeping, conducted based on the Accounting Act. From 2025, the obligation to apply it concerns commercial law companies and businesses whose annual revenues exceed 2.5 million euros (10,711,500 PLN). Accounting books consist of, among others, a journal, general ledger, subsidiary ledgers, inventory, and statements of turnovers and balances. Full accounting is based on the principles of double entry, accrual, prudence, continuity, and completeness. Although it is more costly and demanding than simplified forms, it provides the entrepreneur with a complete picture of the financial situation and forms the basis for preparing financial statements.

If the obligation to maintain accounting books applies to your company and you need support in this area, especially if you operate in the transport industry, we are happy to help! Contact us, and the Evotax team will take care of accounting in your company or provide you with support in the field of tax advisory!