Accounting and accounting rules in Luxembourg

Accounting Rules

Tax Year

The fiscal year begins on January 1st and ends on December 31 of the same year.

Accounting Standards

Starting on January 1, 2005, the EU ruling CE 1606/2002 imposes on all listed companies publishing their consolidated accounts a duty to establish their financial statements in I.A.S./I.F.R.S.

Accounting Regulation Bodies

The Accounting Regulatory Committee under the European Commission
International Accounting Standards Board

Accounting Reports

The general principles of Luxembourg accounting are:
- The principle of clarity and regularity ;
- The principle of fidelity ;
- The principle of continuity.

The annual accounts consist of:
- A balance sheet ;
- A profit and loss account ;
- An appendix.

The balance sheet and the profit and loss account must be established following the scheme determined by the 4th EU directive as they have been transposed into the law. In principle, the duration of an accounting year cannot exceed one year. The closing date of the accounting year must in principle agree with that of the fiscal year, being December 31. Annual accounts must be established in one of the country's three administrative languages (French, English, Luxembourger).

Publication Requirements

The publication obligations of a company vary according to its size. For more details consult the fourth directive (78/660/CEE) as modified by the directive 2003/38/CE.

Small companies can establish a balance sheet, a profit and loss account as well as an appendix in an abridged form. They are not obliged to present a management report, contrary to other companies. They can publish only the abridged balance sheet and an appendix.
Medium companies and large companies have to publish a balance sheet, a profit and loss account, an allocation of earnings proposal, the administrators and auditor's identity, an annual report and the report of the independent auditor. The management report must contain a faithful presentation of the evolution of the company's business and situation.

In addition to this, the EU directive of July 19, 2002 orders all listed European companies to establish, starting from the 2005 accounting year, their consolidated annual accounts based on the IAS/IFRS normas.

Professional Accountancy Bodies

OEC , The Luxembourg Order of Chartered Accountants

Certification and Auditing

The control of medium and big companies must be made by one or several independent auditors of companies, appointed by the general assembly among the members of the Institute of Independent Auditors of Companies. The control of small companies must be made by an accountant appointed by the general assembly for definite duration.

KPMG, Ernst & Young, PricewaterhouseCoopers, Deloitte.

The Institute of Auditors of Companies (IRE)

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