Participations and securities: Accounting registration made easy in Switzerland

When a company in Switzerland acquires securities or stakes, it is crucial to record them correctly in the accounts and to observe the legal requirements. In this blog post, we offer a comprehensive overview of how investments and securities should be treated in the balance sheet.

Investment or Security: The Distinction

Investment: An investment in the sense of Art. 960d Para. 3 OR occurs when a company acquires shares in the capital of another company that are held long-term and allow a significant influence. Specifically, one speaks of an investment when it includes more than 20% of the voting rights.

Securities: When acquiring shares or other securities without significant influence – meaning with less than 20% of the voting rights – this acquisition is considered a security and not an investment.

Accounting Treatment of Investments and Securities

Although investments and other securities are treated similarly in accounting, there are some differences that should be considered:

Investments: In the accounting framework for SMEs, the account 1480 is used for investments.

Securities: Securities are recorded in account 1400.

Typically, a current account such as Bank (1000) or a liabilities account such as Liabilities (2000) is used as the counter account.

Example Entry:

The purchase of stocks worth CHF 4,000 is recorded as follows:

Debit: 1400 Securities CHF 4,000

Credit: 1020 Bank        CHF 4,000

Important Accounting Notes

Transaction Costs: Costs and fees, such as exchange commissions, are added to the acquisition costs.

Dividends and Interest: Income from investments is recorded as investment income, while income from securities is recorded as financial income.