Accounting Standards - An Overview

A financial statement represents the annual financial result of a company and is aligned with the applicable accounting principles or standards. Below you will find an overview of the accounting standards used in Switzerland.

Swiss Code of Obligations (OR)

• Minimum standard with a focus on creditor protection
• Suitable for companies whose financing comes from their own resources
• Neutral in terms of legal form: The size of the company determines the scope of the financial report

Expert Recommendations for Financial Reporting (Swiss GAAP FER)

• Lower regulatory level than IFRS and US-GAAP
• Suitable for SMEs with a national focus that rely on external capital from banks
• Requirement for the accounting data to present a true and fair view of the company's financial, financial, and profit situation (True and fair view)
• Opportunity for smaller companies to limit themselves to the conceptual framework and certain key expert recommendations (Core FER)

International Financial Reporting Standards (IFRS)

• Very high regulatory level
• Suitable for capital market-oriented companies
• Facilitates international comparability of annual and consolidated financial statements
• Admission to all stock exchanges in the world

United States Generally Accepted Accounting Principles (US-GAAP)

• Like IFRS internationally recognized and suitable for capital market-oriented companies
• Compared to IFRS less principle-based and thus very detailed
• US-GAAP and IFRS are increasingly converging

Spread of accounting standards in Switzerland

A survey among Swiss SMEs without listing has shown that 71% exclusively align their accounting according to the provisions of the Code of Obligations. Swiss GAAP FER is used by about 14%, while 12% rely on IFRS. Only about 2% of Swiss SMEs without listing use US-GAAP. Generally, the larger a company is, the more likely it is to apply another accounting standard in addition to the accounting law (OR).

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