Notice to reader: accepted in most cases
Review engagement: asked on larger requests
Audit: rarely required in real estate
How many years
Two full years is the norm. Three are asked when income varies widely.
The level of preparation
- Notice to reader: accepted in most cases
- Review engagement: asked on larger requests
- Audit: rarely required in real estate
Notes to the statements
Notes explain unusual items. Lenders read them before the figures.
What the lender looks for
- The income trend over two or three years
- The company’s debt level
- Amounts withdrawn by shareholders
- Off-balance-sheet commitments, where noted
Interim statements
A year-end older than six months calls for an interim statement.
It may be prepared internally, without the accountant.
A company with no activity
A company created to hold one property produces very short statements.
When they are not required
An individual buying in their own name provides tax returns.
Financial statements apply only to companies.
If you buy through a company, expect both sets of documents.
Speaking to your accountant early
Tell them as soon as you consider a transaction.
They will prepare the documents within the lender’s timelines.
A last-minute request costs more and takes longer.
