Swiss Accounting Guide
This guide explains who in Switzerland must prepare annual financial statements under the Swiss Code of Obligations (CO), how size thresholds work, which obligations apply (including audit types), what the statements contain, key deadlines, and a practical workflow to build Swiss-compliant accounts from the books.
It’s designed for founders, CFOs, accountants, and advisors who need a clear, action-focused overview aligned with Swiss law.
Who must prepare annual financial statements in Switzerland?
Legal entities (AG, GmbH, etc.)
All legal entities (public limited companies/AG, limited liability companies/GmbH, cooperatives, associations and foundations) must keep accounts and prepare annual financial statements under the Swiss Code of Obligations (CO, Art. 957 et seq.).
Sole proprietorships & partnerships
Sole proprietors and partnerships must keep double-entry books and prepare annual financial statements if prior-year revenue is ≥ CHF 500,000. Below that, simplified accounting is permitted (cash-based records of income/expenses and statement of assets/liabilities).
Entities allowed simplified accounting
Besides sole proprietors and partnerships under CHF 500,000 turnover, certain associations and foundations not required to register or to appoint an auditor may also keep simplified accounts.
Swiss size thresholds and why they matter
Ordinary vs. limited audit thresholds
Audit requirements depend on exceeding two out of three criteria in two consecutive years (CO Art. 727):
| Criterion | Threshold (Ordinary audit) |
|---|---|
| Balance sheet total | ≥ CHF 20 million |
| Revenue | ≥ CHF 40 million |
| Full-time employees (avg.) | ≥ 250 |
Public companies and groups preparing consolidated financial statements are subject to an ordinary audit irrespective of thresholds. Companies below these limits are generally subject to a limited statutory examination; very small companies may opt out if conditions are met (see “Audit types”).
What changes with size
Exceeding the thresholds triggers an ordinary audit and, for “larger undertakings,” additional reporting such as a cash flow statement and a management report (Lagebericht) under Swiss law.
Obligations by size (single-entity accounts)
Micro / small entities
- Books & annuals: Balance sheet, income statement, and notes (exceptions for very small sole proprietors/partnerships under CHF 500k revenue).
- Audit: Usually a limited statutory examination; entities with < 10 FTE may opt out entirely with unanimous consent of shareholders/quotaholders.
- Publication: No general public filing; provide to owners and tax authorities.
Medium / large entities
- Additional statements: Cash flow statement and management report for larger undertakings per CO.
- Audit: Ordinary audit if thresholds are exceeded or if public-interest criteria apply (e.g., listed, group accounts).
- Governance: Stricter approval/AGM processes; timely delivery of reports before the meeting.
Audit types (ordinary, limited, opt-out)
- Ordinary audit: Required if ≥2 of the CHF 20m / CHF 40m / 250 FTE thresholds are met for two consecutive years; also for public companies and groups.
- Limited statutory examination: Default for AG/GmbH that do not meet ordinary audit criteria.
- Opt-out: Possible if < 10 FTE on average and all owners consent.
What Swiss annual financial statements include
Core components (all entities with full accounts)
- Balance sheet (structure per CO Art. 959a) showing assets and liabilities/equity (current vs. non-current).
- Income statement (minimum structure per CO Art. 959b), by nature or function.
- Notes (Anhang) (CO Art. 959c) with policies, breakdowns, contingencies, events after the balance sheet date, etc. (Certain very small sole proprietors/partnerships may dispense with notes.)
Additional components for larger undertakings
- Cash flow statement and a management report (Lagebericht) for larger undertakings and for groups (consolidated accounts).
- Financial reporting may be presented in an official Swiss language or English; amounts are in CHF with permitted foreign-currency translation approaches.
Deadlines: preparation, audit, approval & publication
Preparation & approval
- The annual report (incl. financial statements) must be prepared within six months after the financial year-end and submitted to the competent body for approval.
- The ordinary shareholders’ meeting (AGM) must take place within six months after year-end; accounts are typically dispatched to shareholders ~20 days before the AGM.
Publication / filing practice
- Non-public entities: Financial statements are generally not public; they are submitted to tax authorities with the annual tax return.
- Listed companies: Subject to SIX Exchange Regulation timelines (e.g., publication of the annual report; AGM within six months).
From bookkeeping to Swiss annuals: a practical workflow
1) Close the books & inventory
- Ensure bookkeeping follows CO principles (clarity, completeness, prudence) and take physical inventory where applicable.
- Reconcile subledgers (AR/AP, fixed assets, payroll, bank) and lock posting periods.
2) Cut-off & accruals
- Record prepayments and accrued income/expenses to allocate revenues and costs to the correct period.
- Review revenue cut-off, WIP and long-term contracts where relevant.
3) Valuation & measurement
- Apply CO valuation rules (initially at acquisition/production cost; lower of cost or market for current assets; impairment testing where needed).
- Apply going-concern; if liquidation is expected within 12 months, use liquidation values for affected activities.
4) Provisions & reserves
- Recognise provisions for obligations; disclose contingencies in the notes.
- Swiss law permits certain hidden reserves for creditor protection; disclose movements where required.
5) Taxes & deferred taxes
- Calculate current taxes; recognise deferred taxes if you prepare “true and fair view” statements under a recognised standard (e.g., Swiss GAAP FER/IFRS) or if policy requires.
6) Assemble statements
- Prepare balance sheet and income statement per CO minimum structures; draft notes per CO requirements.
7) Management report / cash flow (if applicable)
- Prepare a management report (business performance, risks, outlook) and a cash flow statement if you qualify as a larger undertaking.
8) Audit & board/owners’ approval
- Arrange the ordinary or limited audit as required; the board approves the annual report for submission to owners.
9) Shareholders’ meeting & delivery
- Hold the AGM within six months; deliver the annual report to shareholders in time (commonly at least 20 days before the meeting).
Frequently asked Questions about Swiss Accounting:
ℹ️ Click a question to reveal the answer:
Who must keep books and prepare annual financial statements in Switzerland?
All legal entities (AG, GmbH, cooperatives, associations, foundations) and sole proprietors/partnerships with revenue of at least CHF 500,000 in the previous year. Below that, simplified accounting is allowed.
What are the components of Swiss annual financial statements?
Balance sheet, income statement, and notes. Larger undertakings add a cash flow statement and a management report.
Which valuation principles apply under Swiss law (CO)?
Prudence, clarity, completeness, and consistency. Assets are initially measured at acquisition/production cost; current assets follow a lower of cost or market approach; impairments are recognized when needed.
What triggers an ordinary audit vs. a limited statutory examination?
If a company exceeds in two consecutive years at least two of three criteria—CHF 20m assets, CHF 40m revenue, 250 FTE—an ordinary audit is required. Otherwise, a limited statutory examination usually applies.
Can small Swiss companies opt out of an audit entirely?
Yes. If the company has fewer than 10 FTE on average and all owners consent, it may opt out of an audit (opting-out).
What are the deadlines to prepare and approve the annual report in Switzerland?
The annual report must be prepared within six months after year-end and submitted for approval. The AGM must also be held within six months after year-end.
Are Swiss company financial statements publicly available?
Generally no for non-public entities. They are provided to shareholders and submitted with the tax return. Listed companies publish according to SIX rules.
Do sole proprietors under CHF 500,000 revenue need double-entry bookkeeping?
No. They may keep simplified, cash-based accounts (income/expenses and statement of assets/liabilities).
When are cash flow statements and management reports required in Switzerland?
For larger undertakings (e.g., those meeting ordinary-audit size), a cash flow statement and a management report are required; groups also prepare consolidated statements.
Which accounting languages and currency are allowed for Swiss annuals?
Financial reporting may be prepared in an official Swiss language or English. Amounts are in CHF, with permitted foreign-currency translation approaches disclosed in the notes.
Are “hidden reserves” allowed under Swiss law, and must they be disclosed?
Swiss law permits certain hidden reserves to protect creditors. In specific cases, the use or release of such reserves must be disclosed in the notes (e.g., if it materially improves the result).
What about sustainability/non-financial reporting in Switzerland?
Large public-interest entities have non-financial reporting obligations under Swiss law. Listed companies have begun shareholder approvals of such reports.
Does Swiss law prescribe a specific income statement format (by nature vs. function)?
The CO provides a minimum structure; entities may present by nature or by function provided clarity and consistency are maintained.
Are consolidated financial statements required for groups in Switzerland?
Yes, if a company controls one or more undertakings and group-size conditions are met. Consolidated accounts are subject to an ordinary audit.
How are foreign-currency financial statements handled under Swiss CO?
CO permits presentation in a functional currency with translation disclosed; typical practice translates balance sheet at closing rate and income statement at average rate with translation differences recognized in equity.
What are typical Swiss-specific year-end adjustments (examples)?
Inventory to lower of cost or market; impairment of receivables; accrued vacation/bonus provisions; warranty provisions; foreign-currency remeasurement; tax accruals; disclosure of contingent liabilities in notes.
Do Swiss SMEs have to file their annuals with a public registry like in Germany?
No. Switzerland has no general public filing (no Bundesanzeiger equivalent). Non-public entities submit to owners and tax authorities; listed issuers publish per exchange rules.
When must listed Swiss companies publish their annual report?
Per SIX Exchange Regulation, issuers publish within set timelines (with the AGM held within six months after year-end). Specific DFR/DRRO timelines apply to annual/interim reports.
Which standards can Swiss companies use beyond CO (e.g., for a true & fair view)?
Companies may adopt a recognised standard like Swiss GAAP FER, IFRS, or US GAAP if required or chosen; those statements are audited and provide a “true and fair view.”
What practical steps convert bookkeeping into Swiss-compliant annuals efficiently?
Checklist: close ledgers, take inventory, post accruals/prepayments, apply CO valuation, recognise provisions, compute taxes, compile balance sheet & income statement, draft notes, add cash flow/Lagebericht if required, complete audit, approve and hold AGM within six months.
