Managing your accounting

One of the fundamental principles of accounting is the independence of accounting periods or years.

When reporting or closing the accounts at the end of the year, it is therefore important to clearly define the income and expenses linked to the accounting period. If this is not the case, an adjustment called a transitional or closing entry is necessary.

Depreciation is the loss of value of an asset caused by its use and obsolescence over time.Whether for tangible assets (movable and immovable property) or intangible assets, depreciation should be applied to smooth the devaluation of the asset over time.

Under current accounting standards, it is possible to create hidden reserves, the most common case being inventories under CO standards. The tax authorities accept a latent reserve representing 1/3 of the total amount of inventories.

The CO

Standards according to the Code of Obligations (Art. 957). All companies required to be entered in the Commercial Register must keep proper accounts. This is the case for all commercial companies, with the exception of sole proprietorships, which are only required to register if gross annual sales exceed CHF 100,000.00.

Les RPC

The Swiss GAAP FER (Swiss Accounting and Reporting Recommendations) focus on the presentation of accounts by small and medium-sized entities, as well as groups with a national reach, non-profit organizations and pension funds. The FER provide them with an accounting structure that gives a true and fair view of their assets, financial position and results.

IFRS

The aim of IFRS (International Financial Reporting Standards, an acronym for Standards International de Presentation des Comptes) is to offer shareholders, financiers and investors a uniform presentation of accounts in different countries, as well as balance sheets and income statements that best and most fully reflect a company's true economic situation.

IPSAS

IPSAS are the international accounting standards for the public sector.