The final paper entitled “Application of HSFI in Financial Statement Preparation Using the Example of a Construction Company” presents the theoretical overview of financial statements, their characteristics, rules and purposes, as well as a practical presentation of the preparation of the financial statements. The theoretical part of the paper explains the basic financial statements such as the balance sheet, income (profit and loss) statement, cash flow statement, statement of changes in equity and notes to the financial statements. The practical part of compiling annual financial statements is presented on the example of a real company through the application of the Croatian Financial Reporting Standards (HSFI). The accounting software is used to explain typical transactions within the company with regard to the main accounting activities, such as recording the purchase of materials and services from suppliers and invoicing the performed works and services to the customer. Furthermore, in the practical part of the paper, the pre-closing accounting activities are presented, such as control of customer and supplier accounts, depreciation calculation, closing of expense and revenue accounts and presentation of the trial balance. Finally, the paper presents the annual financial statements and additional documents that the company is required to compile and submit for statistical purposes and public disclosure.