Articles in Category: Accounting

Update 2016 of the Luxembourgish Commercial and Accounting Law

Law of 9 December 2015 modifying Luxembourgish accounting standards

On 9 December 2015 the Luxembourgish Parliament adopted the draft bill 6718 which transposes the Directive 2013/34/EU of the European Parliament and the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings into national law.

Amongst other things the new law introduces the materiality principle and modifies various provisions relating to the presentation of the annual accounts and the notes to the annual accounts.

Balance sheet and profit and loss account are harmonized to the EU Directive. The presentation of the profit and loss account has been changed from account form to staggered form (list).

The thresholds to determine large sized entities have been increased to EUR 20 million (currently EUR 17.5 million) for the total balance sheet and EUR 40 million for the turnover (currently EUR 35 million).

The main changes related to the notes to the annual accounts are the following:

  • Introduction and definition of the materiality concept;
  • Obligation to present the notes to the annual accounts in a specific order;
  • Obligation to describe the accounting policies in addition to the valuation rules;
  • Disclosure of gross amounts in case of compensation/netting;
  • Nature and financial impact on post balance sheet events for medium and large entities;
  • Disclosure requirement of exceptional items;
  • Additional disclosure requirement for small-sized entities related to the average number of staff by category;
  • New disclosures exemptions for small-sized entities relate to:
    • information regarding the investments in which they hold at least 20% of the share capital, except when this information is so important that it could alter the true and fair view of the annual accounts;
    • information on the fair value of financial fixed assets in case the latter is below the book value of the asset.

Furthermore Goodwill and developments costs which useful life are not reliably estimated cannot be depreciated over more than 10 years

The New Law shall apply for the first time to the annual accounts for financial years beginning 1 January 2016 or during the calendar year 2016.

IFRS in Luxembourg

Luxembourg lawmakers took a significant step to modernizing accounting in the Grand Duchy by passing a respective law on 10 December 2010.

The law amends several items of the balance sheet and the profit and loss account and redefines criteria for the determination of company size. One of the main changes, however, is the introduction of the fair value option in the Luxembourg accounting framework. The law confirms the fair value accounting option for financial instruments under Luxembourg GAAP and introduces the possibility of applying international financial reporting standards for the preparation of annual financial statements.

The following table shows the situation before and after the enactment of the law:

  Before enactment     After enactment  
Lux GAAP +Fair Value
Lux GAAP +Fair Value
Annual Accounts              
Listed companies Possible derogation   Obligation   Option Option Benchmark
Credit institutions, insurance and
re-insurance companies
Option Option Benchmark   Option Option Benchmark
Unlisted companies Possible derogation   Obligation   Option Option Benchmark
Consolidated accounts              
Listed companies Obligation       Obligation    
Credit institutions, insurance and
re-insurance companies
Option Option Option   Option Option Option
Unlisted companies Possible derogation Option Benchmark   Option Option Benchmark

We would be happy to assist you with the implementation of the fair value option or the introduction of International Financial Reporting Standards respectively.


Creation of a balance sheet database

The creation of a balance sheet database (“Centrale des bilans”) is one of the measures laid down in a law passed on 10 July 2011, the objective of which is to centrally and electronically capture all financial information on companies registered in Luxembourg.

The management of the “Centrale des Bilans” falls under the responsibility of the Luxembourg Statistical Office (STATEC). The law also regulates the electronic filing of annual financial statements at the Luxembourg Trade Register (RCSL).

Two electronic platforms are used to collect the data: the „Plateform élèctronique de collecte des Données Financière“ (eCDF) and the „eRegistre de Commerceet des Sociétés“ (eRCS).

The law becomes applicable from 1 January 2012.

The following table provides an overview of which types of company have to apply the electronic filing procedures and to what extent.

Standard chart of accounts

Following a decree issued by the Grand Duke on 10 June 2009 the use of a standard chart of accounts has become mandatory in Luxembourg.

The measure is part of the ongoing modernization of financial reporting and accounting rules in Luxembourg which began in 2002.

The standard chart of accounts must be used by the following entities and persons:

  • Commercial companies
  • European and other economic interest groupings
  • Branches and headquarters established in Luxembourg by sole proprietors not resident in Luxembourg, companies subject to the law of a foreign state (comparable to Luxembourg commercial companies) and economic interest groupings established abroad
  • Sole proprietors

The decree will apply to fiscal years starting after 31 December 2010 and to sole proprietors as of calendar year 2011. The first filings of account balances under the standard chart of accounts format will thus have to be effected in 2012.

We can assist you in implementing the new standard chart of accounts in your enterprise.


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