Accounting and Financial Reporting

Accounting

Accounting & Financial Reporting

Framework

The financial reporting framework in Switzerland is established by the Swiss Code of Obligations (Swiss CO). The Swiss CO requires all companies to prepare their financial statements in accordance with Swiss CO. In addition, certain companies must also prepare financial statements in accordance with a recognized financial reporting standard as described later in this section. These recognized standards include Swiss GAAP FER, IFRS, IFRS for small and medium-sized entities (SMEs), US GAAP, and IPSAS. PIEs are required to prepare their group financial statements in accordance with IFRS or US GAAP if they are listed on a major stock exchange, and in accordance with Swiss GAAP FER if they are listed on the domestic market. The Swiss GAAP FER Foundation, a private independent standard-setting body, establishes the Accounting and Reporting Recommendations (Swiss GAAP FER) which are Swiss accounting standards that provide a true and fair view of financial position, cash flows, and the results of operations.

The fiscal year is generally the calendar year unless the company uses a different financial year basis. For example, the first financial year may be longer or shorter than 12 months. Federal and cantonal/municipal income taxes are assessed annually on the current year’s income.

The principles of orderly accounting according to Swiss regulations are as follows:

Complete, truthful, and systematic recording of transactions and matters
Documentary proof
Clarity
Appropriateness given the type and size of the business
Verifiability

The accounting shall present the financial position of the business so that a third party can make a reliable assessment of it. The fundamentals of financial reporting are the assumption of going concern and a cut-off regarding time and nature.

The principles of orderly financial reporting according to Swiss regulations are as follows: