The liquidator of the Byre Theatre said creditors were owed £471,271.
However, Graeme Smith, of accountants Henderson Loggie, said the assets of the theatre have been estimated to have a resaleable value of £271,103, leaving a deficit of £200,168.
Mr Smith said the withdrawal of funding from the Scottish Arts Council in 2011 was key in the theatre company's downfall.
He said: "The key issues to be taken from the report and the Statement of Affairs [prepared by its directors] are the extreme difficulties faced in the current financial climate as a result of the reduction of grant funding available to the Byre.
"Despite funding being available for one-off projects, which allowed a number of outreach projects to be carried out for the benefit of the community, existing general funding did not cover the overheads of maintaining the Byre Theatre and the staff needed to operate it."
The company identified a looming funding deficit in January this year and that there was insufficient cash available to meet overheads, he added.
The company would have needed £60,000 to £80,000 to cover the needs of the theatre until its proposed transfer to Fife Cultural Trust in April 2013, but this did not happen.
Fife Cultural Trust is now expected to reopen the Byre by the end of the year.
Mr Smith said the Byre would have finished the financial year with an operating loss of £75,000, which would have been unsustainable.
He added: "There is no doubt there are many contributory factors in the closure; however, poor income over recent months appears to have been one of the key issues."