Knowledge

Accounting and accounting rules in Switzerland

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The tax year in Switzerland is generally the calendar year, unless a company uses a different financial year. The federal, cantonal and communal tax on income is assessed each year, based on the income obtained in the current year.

Accounting standards in Switzerland

The Swiss Code of Obligation does not include any specific provisions regarding the accounting standards used to prepare consolidated financial statements. The SIX Swiss Exchange is governed by the IPO laws (Initial Public Offering) which require accounting standards that are based on the true and fair view principle, such as Swiss GAAP FER, US GAAP or IFRS (International Financial Reporting Standards). The Swiss GAAP FER (Fachempfehlungen zur Rechnungslegung) accounting standards are mostly used by small to medium-sized companies and national group firms, because they are usually seeking investments from Swiss investors.

Industry-specific accounting standards are applicable to regulate accounting provisions for insurance companies, non-profit organizations and pension funds. If certain companies are listed on the SIX Swiss Exchange or are listed companies that have their domicile in the EU, they must prepare their consolidated financial statements in accordance with the IFRS standards.

Accounting regulation bodies in Switzerland

EXPERTsuisse, the Swiss Expert Association for Audit, Tax and Fiduciary is the main accounting regulation body in Switzerland. The association is comprised of more than 6,000 Swiss certified auditors, tax and fiduciary experts and around 850 companies.

Accounting reports

Companies registered into the Swiss Commercial Register must maintain accounting records and follow the general accounting principles as provided by the Swiss Code of Obligations. It is mandatory to maintain the balance sheet, the financial statement which includes loss and profit and an inventory in Swiss francs. This requirement does not apply to the day-to-day bookkeeping.

Publication requirements

An annual financial statement and its associated income statement, balance sheet and accounting notes must be prepared, according to the Swiss legislation. These documents must reflect the company’s assets and earnings, valued as accurately as possible.

Financial information required for Swiss business structures

The Swiss Code of Obligations applies to all types of entities; however specific reporting requirements differ depending on the size of the company.

Clubs and foundations that are not registered into the commercial register, foundations exempt from the obligation of appointing an auditor, partnerships and sole proprietorships with annual revenue of less than 500,000 CHF must maintain income and expenditure accounts and financial positions. Audits can be conducted if they are approved by each shareholder; otherwise audits are not required for companies with no more than 10 full-time employees.

Legal entities that are not required to undergo ordinary audits, partnerships and sole proprietorships with revenues of at least 500,000 CHF in the previous year have the obligation to prepare financial statements consisting of balance sheets, profit and loss accounts and notes. Ordinary audits are required only if certain criteria are met.

Large companies that are required by law to undergo ordinary audits have the obligation to prepare financial statements consisting of balance sheets, profit and loss accounts, notes, additional notes and cash flow statements.

Very large companies that are listed on the stock exchange, cooperatives with at least 2,000 members and foundations required by law to undergo ordinary audits must prepare financial statements according to recognized standards.

Legal entities that control one or more companies with the obligation to prepare financial statements (groups) are not exempt from producing consolidated accounts.

Auditing and certifications

Swiss companies must have a statutory auditor who conducts an annual audit on the financial situation of each company or organization. According to the Swiss commercial law, a company must be subjected to a full audit if it qualifies as a public company or if it meets 2 of the 3 criteria in two consecutive business years:

  • The balance sheet totals at least 20 million CHF;
  • It has revenue of at least 40 million CHF;
  • It has at least 250 full-time employees.

The full audit of a company must be conducted by an audit expert who is certified in Switzerland and supervised by an audit firm. Non-public companies that meet two of the above criteria the audit can be conducted by an audit expert who is certified in Switzerland.

Companies that are no subjects of full audits are usually subjects of limited audits, which can be conducted by a certified auditor. Companies that have no more than 10 full-time employees are also able to opt for limited audits.

For more information regarding accounting and audits or to acquire the services of our accounting and audit experts, please contact us.

 

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