Determining the Opening Balances Before Starting a Business in Georgia

Items to record include, in particular, bank and cash balances, contributed assets, inventory, receivables, and other assets. These are offset by loans, supplier payables, and other assumed obligations. Cash and in-kind contributions must be attributed to the founders or shareholders and to the appropriate capital or contribution accounts. Bank statements, cash logs, contracts, invoices, inventory lists, and handover records support the amounts recorded. For machinery, vehicles, inventory, or intangible assets, ownership, the date of transfer, and the valuation must be documented in a verifiable way. Expenses paid before the business was established must not be recorded as assets or opening balances without review simply because of when they were paid. For amounts in foreign currencies, record the original amount, the exchange rate used, and the equivalent in GEL as of the relevant date. If opening documents include VAT, its treatment must be reviewed separately based on registration status, business use, and the available tax documentation. The total recorded assets must reconcile with the total liabilities and capital. A final review of supporting documents before approval helps prevent planned amounts, rather than actually documented opening balances, from being included in the opening balance sheet.