Article Post on 08 May 2014

Modernisation of company accounting legislation and of the Commission of Accounting Standards

The draft bill n°6376 was adopted by the Chamber of Deputies on 09 July 2013.

The law dated 30 July 2013 reformed the Commission of Accounting Standards (the “Law”)1 and amended various provisions relating to the accounting and annual accounts of undertakings as well as consolidated accounts of certain forms of companies and modified:

  • title II of the book I of the Commercial Code2;
  • title II of the law dated 19 December 2002 relating to the register of commerce and companies as well as to the accounting and annual accounts of undertakings3; and,
  • section XVI of the Law dated 10 August 1915 on commercial companies4.

One of the most important innovations of the Law relates to the Commission of Accounting Standards (Commission des Normes Comptables), which is now established under the legal form of an economic interest group (groupement d’intérêt économique) in order to grant to this entity new human and financial resources as well as more independence / autonomy to carry out its missions. The Commission of Accounting Standards will have the legal personality and the power to levy an administrative tax amounting to a maximum of EUR 10 on filings of annual and consolidated accounts.

The other mains amendments introduced by the Law are:

  • modifications of the names of several balance sheets and income statement headings;
  • optional scope of the principle “substance over form”;
  • standardized balance sheet and income statement formats;
  • allowance of the application of IAS 24 “Related party disclosures”;
  • simplification of disclosure requirements for small- and medium-sized companies;
  • flexibilisation of the presentation of Lux GAAP balance sheets and income statements; and,
  • mandatory compliance with the standard chart of accounts for the FSPs.

In addition, the Law introduced for companies using the fair value measurement:

  1. a requirement to recognise deferred tax liabilities, i.e. account for income tax liabilities arising from transactions recorded in the current financial year, but which may or may not be realised in the future periods; and,
  2. a method of calculation of distributable reserves.

Finally, the Law brought some clarifications and confirmed certain practices by including them in the Law:

  • clarification of the no-netting principle, which is defined by the Law as a generally applicable principle, except in cases where a law specifically provides for a right to netting;
  • approval of the principle of filing annual accounts in English or German as an alternative to French; and,
  • introduction of a formal extension of the exemption possibilities applicable under the specific parent-subsidiaries regime.

All provisions of the Law entered into force on October 2013 except:

  • if companies decided otherwise for their running financial year, as most of the Luxembourg companies closed their accounts on 31 December 2013; and,
  • for the modified layouts for the balance sheet and the profit and loss account (which may not yet apply to any financial year starting in 2013).


1 Loi du 30 juillet 2013 portant réforme de la Commission des normes comptables et modification de diverses dispositions relatives à la comptabilité et aux comptes annuels des entreprises ainsi qu’aux comptes consolidés de certaines formes de sociétés et modifiant:
2 le titre II du livre Ier du code de commerce ;
3 le titre II de la loi modifiée du 19 décembre 2002 concernant le registre de commerce et des sociétés ainsi que la comptabilité et les comptes annuels des entreprises ;
4 la section XVI de la loi modifiée du 10 août 1915 concernant les sociétés commerciales (Mémorial A 177, 02 octobre 2013).

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