Understanding the contents and form of the BVI Annual Return Template

As explained in our previous article, ‘BVI Annual Return – Everything You Need To Know’, from 1 January 2023, all BVI Business Companies need to prepare and submit to their BVI Registered Agent a BVI Annual Financial Return (‘Annual Return’) 9 months after their financial year end. The form of the Return is simple and straightforward to us Accountants, however, in this article we explain in further detail what each line of the Annual Return template represents so that to give you a better understanding on what is to be reported.

BVI Annual Return Template consists of the following:

BALANCE SHEET

ASSETS

Cash and Cash Equivalents

This represents the total value of liquid assets held by the company, including physical cash, bank account balances, and highly liquid investments with short maturities. It reflects the company’s ability to meet its short-term obligations.

Loans and Receivables

This includes any money owed to the company, often in the form of loans provided or trade receivables. It’s an important indicator of the company’s liquidity and ability to generate cash flow. It represents assets that are expected to be collected in the future, usually within a year.

Investments and Other Financial Assets

This section encompasses investments in other entities, stocks, bonds, and any other financial instruments held for the purpose of generating profit. It also includes any financial assets that don’t fit into the categories of cash equivalents or loans and receivables.

Tangible Fixed Assets

Tangible fixed assets are physical assets with a finite useful life, such as land, buildings, machinery, and vehicles. They are not meant for sale in the ordinary course of business.

Intangible Assets

Intangible assets lack a physical presence but may have significant value. This includes items like patents, trademarks, software copyrights, and goodwill.

Other Assets

This category covers any other assets that don’t fit into the aforementioned categories. It may include prepaid expenses or deferred tax assets or accrued income.

LIABILITIES

Accounts Payable

Accounts payable represent the company’s outstanding bills and obligations to suppliers and vendors. This is essentially the money the company owes to external parties.

Long-term Debts

Long-term debts are financial obligations that are due over an extended period, usually longer than one year. This includes loans, mortgages, or any other debt instruments.

Other Liabilities

This section encompasses any other liabilities that don’t fall into the categories of accounts payable or long-term debts. It could include deferred tax liabilities or contingent liabilities or accruals.

INCOME STATEMENT

REVENUE

Revenue, also known as sales or turnover, is the total amount of money generated by the company from its normal business operations. This is a critical metric for assessing a company’s financial performance.

Cost of Sales

The cost of sales includes all the direct costs associated with producing or delivering the company’s products or services. This encompasses items like raw materials, labor, and manufacturing overheads.

Gross Profit

Gross profit is the difference between revenue and the cost of sales. It reflects the profitability of the company’s core operations before considering indirect costs like operating expenses.

EXPENSES

Operating Expenses

Operating expenses are the costs associated with running the day-to-day operations of the business. This includes items like rent, utilities, salaries, and marketing expenses.

Other Expenses

This category encompasses any non-operating expenses that are not included in the cost of sales or operating expenses. This might include interest expenses or losses from the sale of assets.

Income Tax Expenses

Income tax expenses represent the amount of income tax the company owes based on its taxable income.

Total Expenses

Total expenses are the sum of all the costs incurred by the company, including both operating and non-operating expenses.

Net Income / Expenses

This is the final line item in the income statement and reflects the overall profitability of the company. A positive figure indicates a net profit, while a negative figure indicates a net loss.

Copy of the Return

You can find a copy of the return in pdf format here. You can also see the full annual financial return template below: