The Annual Financial Statement in the Law of Obligations

The regulations regarding the annual financial statements are located in Art. 959 et seq. of the Swiss Code of Obligations. The annual financial statements must meet various conditions.

Annual Financial Statements

The annual financial statements consist of the balance sheet, the income statement, and the notes.

According to Art. 959 of the Swiss Code of Obligations, the balance sheet presents the asset and financing situation of a company at the balance sheet date. It is divided into assets and liabilities. Assets must be divided into current and fixed assets, and liabilities into short-term debt, long-term debt, and equity. The details that need to be disclosed within these positions are specified in Art. 959a of the Swiss Code of Obligations.

Art. 959b of the Swiss Code of Obligations stipulates a minimum structure for the income statement. The income statement represents the earnings situation of a company over a fiscal year. The income statement differentiates between production performance and sales performance.

The last mandatory component of the annual financial statements is the notes. The notes supplement and explain individual components of the annual financial statements. The necessary details that the notes must contain are found in Art. 959c of the Swiss Code of Obligations. Art. 960 of the Swiss Code of Obligations then specifies that valuation must be prudent. Assets may only be accounted for initially at acquisition or production costs at most. Art. 960a of the Swiss Code of Obligations additionally mentions other points such as depreciation.