The Balance Sheet in Costa Rica: How to Read Your Company's Financial Position
Your balance sheet answers three questions on a single page: what the business controls, what it owes, and what is left for its owners. Unlike the income statement, which covers a stretch of time, it freezes one exact date, usually the last day of the month or of the fiscal year.
It is also the first document a bank, a prospective partner or Hacienda will ask to see. Here is a practical guide to how it is built, how to read it, and where Costa Rican businesses most often get it wrong.
One statement, two names
IFRS uses the formal title statement of financial position, while balance general remains the everyday term in Costa Rica: in company records, accounting practices, bank files and public documents. The IASB confirmed that those titles are not mandatory, so both names refer to exactly the same statement. There is no technical difference between them.
The equation everything rests on
Assets = Liabilities + Equity. Read the other way round, Equity = Assets minus Liabilities. The two sides must always agree.
A balance that does not agree normally points to an entry recorded on one side only, an open clearing account, or an unreconciled foreign-currency movement. Be careful with the opposite assumption, though: a statement that adds up is not automatically a correct one. An overstated asset, a misclassified account or an omitted obligation can all survive inside a perfectly balanced statement.
The five blocks
IAS 1 asks for a split between current and non-current items, unless a presentation based on liquidity gives more reliable information. In practice the statement is grouped as follows.
Current assets: cash and equivalents, trade receivables, inventory, prepayments and recoverable taxes. Broadly, what will be realised within twelve months or within the normal operating cycle.
Non-current assets: property, plant and equipment, investment property, intangibles, right-of-use assets, long-term investments and deferred tax assets.
Current liabilities: suppliers, taxes payable, payroll and social charges, short-term borrowings and the current portion of long-term debt.
Non-current liabilities: long-term loans, lease obligations, long-term provisions and deferred tax liabilities.
Equity: share capital, legal and statutory reserves, retained earnings, the result for the period and other comprehensive income.
Classification is not decided by the name of the account. What matters is the nature of the item, the normal operating cycle and when the company expects to recover or settle it.
What the numbers tell you
Four measures come straight off the statement and cover most management conversations.
Working capital: current assets minus current liabilities. The cushion available for day-to-day operations.
Current ratio: current assets divided by current liabilities. Above 1 is a starting point, not a verdict, because slow-moving inventory or doubtful receivables can hide behind a healthy figure.
Acid test: current assets minus inventory, divided by current liabilities. Whether you could pay without selling stock first.
Debt ratio: total liabilities divided by total assets. Only meaningful against your sector, your own history and your ability to generate cash.
Vertical analysis expresses each line as a percentage of the total and shows where your resources are concentrated. Horizontal analysis compares this year against last and shows what moved. IAS 1 requires the comparative column in any case, so the second reading costs you nothing.
Seven errors we see most often
Leaving the entire long-term loan in non-current liabilities. The instalments falling due in the next twelve months belong in current.
Presenting deferred tax as current. Deferred tax assets and liabilities are always non-current, with no exception.
Netting a receivable against a payable with the same counterparty. Offsetting is not permitted except in specific cases: present gross and disclose related-party relationships in the notes.
Dropping the prior-year comparative column. A complete set of financial statements needs at least two periods.
Showing fixed assets at cost. What belongs on the statement is net book value, after accumulated depreciation and any impairment.
Failing to carry the result for the year and the distributions to partners through equity.
An incomplete header. Entity name, exact cut-off date, currency and rounding are formal requirements, not decoration.
Who signs it in Costa Rica
Preparing and approving the financial statements is management's responsibility. Certifying them for a third party, whether a bank, an authority or an incoming partner, is reserved by Law 1038 to an Authorized Public Accountant registered and active with the Colegio de Contadores Publicos de Costa Rica.
Preparation, approval, certification and audit are four different acts, and only the last two call for an independent professional. Dormant companies are not exempt either: they still hold capital, accumulated results and residual balances, and they still have to file.
What changes in 2027
IFRS 18 replaces IAS 1 for annual periods beginning on or after 1 January 2027. Most of the change lands on the income statement and on performance disclosures, while the requirements for the statement of financial position carry over largely intact. The third edition of IFRS for SMEs applies from the same date, with early adoption available, and Resolution MH-DGT-RES-0015-2026 sets out how Tributacion will read IFRS for tax purposes.
That makes 2026 the year to review the framework each entity applies, tighten current and non-current classification, document accounting policies, and map the gaps between book and tax treatment before they turn into a reconciliation problem.
A second read before it leaves your office
A balance sheet is a photograph of your business at a single date, and a well-prepared one is the foundation for decisions about dividends, capital, debt and growth, as well as the starting point for your reconciliation with Hacienda. If your year-end figures are heading to a bank or to the tax authority, they deserve a careful review first.
Segura Advisor works bilingually with businesses, investors and expats in Guanacaste. Book a consultation and we will go through your classification, your comparatives and your equity movements with you.
Be sure. Be Segura.
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