Who Must Prepare a Consolidated Financial Statement in Switzerland?

Under Art. 963 CO/OR, a Swiss parent that controls one or more undertakings must prepare consolidated financial statements. Control can arise through majority voting rights, the right to appoint or remove the majority of the board, or other means of dominant influence.

Small-group exemptions and higher-level consolidation

A legal entity is exempt if, together with the controlled undertakings, it does not exceed two of three thresholds for two consecutive years: total assets CHF 20m, revenue CHF 40m, and 250 FTE on average (Art. 963a CO/OR). Exemptions also apply if the group is included in equivalent higher-level consolidated accounts made publicly available.

Components of the Consolidated Financial Statements

Swiss consolidated financial statements typically comprise a consolidated balance sheet, income statement and notes in accordance with the chosen framework (CO/OR minimum vs. Swiss GAAP FER vs. IFRS). Many groups also provide a management report (Konzernlagebericht) in practice or as required by listing rules.

Group management report (Konzernlagebericht)

The group report explains performance, risks, opportunities, outlook and key non-financial aspects. For SIX-listed issuers, specific reporting directives apply (e.g., periodic reporting and selected non-financial topics per Swiss regulation).

Optional statements under Swiss law/standards

Under Swiss GAAP FER and IFRS, a cash flow statement and statement of changes in equity are standard components. Under CO/OR-only consolidated accounts, these are not always mandatory but are common for transparency.

Consolidation Scope and Methods

The scope includes the parent and all controlled subsidiaries; rare exclusions may apply (e.g., immateriality or severe long-term restrictions). Uniform accounting policies are used at group level under FER/IFRS.

Full consolidation (subsidiaries)

Controlled entities are combined line-by-line; intra-group balances, income/expenses and unrealized profits are eliminated. Non-controlling interests are presented separately in equity and result allocation.

Proportionate consolidation (joint ventures)

Under Swiss GAAP FER, proportionate consolidation may be applied to certain joint ventures. Under IFRS, joint ventures are generally accounted for using the equity method (IFRS 11).

Equity method (associates)

Associates and joint ventures not proportionately consolidated are generally included using the equity method, reflecting the investor’s share of post-acquisition results and OCI.

Exclusions from consolidation

In limited cases, entities can be excluded (e.g., immateriality in aggregate, disproportionate cost, or severe long-term restrictions). Materiality is assessed at group level.

Publication and Audit

Swiss groups must have consolidated accounts audited and approved in time for the annual general meeting (AGM). Public availability depends on listing status and other specific laws.

Approval, timing, and public availability

The AGM must be held within six months after the financial year end to approve the accounts. In Switzerland, financial statements of non-listed companies are generally not public; listed issuers publish per exchange rules.

Audit requirements

Consolidated accounts are subject to an ordinary audit. Audit scope in Switzerland varies (ordinary audit vs. limited statutory examination for stand-alone accounts), but groups preparing consolidated accounts fall under the ordinary audit regime.

Purpose and Users of the Consolidated Financial Statements

Consolidated financial statements present a true and fair view of the group’s assets, liabilities, financial position and performance as a single economic entity, supporting decision-making by investors, lenders, employees and other stakeholders.

“True and fair view” and decision-useful information

High-quality group reporting strengthens governance, reduces information risk, and supports access to capital on better terms.

Reporting Frameworks in Switzerland: CO/OR, Swiss GAAP FER, IFRS (and US GAAP)

Swiss law (Arts. 957 ff. CO/OR) sets minimum requirements. In addition, recognised reporting standards include Swiss GAAP FER, IFRS (as adopted by the IASB/EU acceptance in practice), and US GAAP (particularly for SIX’s International Reporting Standard).

Requirements for SIX-listed issuers

On SIX Swiss Exchange, the permitted frameworks depend on the reporting standard: the International Reporting Standard requires IFRS or US GAAP; the Swiss Reporting Standard requires Swiss GAAP FER. Periodic reporting and disclosure follow SIX directives.

Voluntary use of Swiss GAAP FER or IFRS

Non-listed groups may elect Swiss GAAP FER or IFRS for consolidation to provide a true and fair view and improved comparability. Where consolidated accounts are prepared under a recognised standard, separate CO/OR accounts remain required for statutory purposes.

Relationship to Tax Law and Presentation of Taxes

Commercial accounting (CO/OR or FER/IFRS) and taxation are related but distinct. Swiss tax returns are based on statutory (CO/OR) stand-alone accounts; consolidated accounts inform stakeholders but are not the direct tax base.

Current vs. deferred taxes (Swiss GAAP FER vs. CO/OR)

Swiss GAAP FER (FER 11) requires recognition of current and deferred taxes using a balance-sheet approach, with separate presentation of deferred tax assets and liabilities. Under CO/OR-only accounts, deferred taxes are not explicitly mandated; practice varies and many groups adopt FER or IFRS for consolidation to ensure robust deferred-tax accounting.

Consolidation-related temporary differences

Purchase price allocation, fair-value step-ups, and elimination of intercompany profits typically create temporary differences; these give rise to deferred taxes under FER/IFRS.

Disclosures in the notes

Typical FER/IFRS disclosures include the tax rate(s), reconciliation of expected to reported tax expense, movements in deferred tax balances by source, and information on unrecognised deferred tax assets (e.g., on loss carryforwards).