Overview of Accounting Standards

Anyone who takes a look at the financial statements of Swiss companies will notice that they use a variety of different accounting standards: it can be easy to lose track. Learn about the most important frameworks applicable in Switzerland in this article.

Code of Obligations

The Code of Obligations (OR) specifies which companies, in addition to the regular financial statements, must prepare statements according to a recognized standard (Art. 962 OR). The obligation to prepare financial statements according to a private set of rules is intended to enhance the meaningfulness of the statements and strengthen creditors' protection. These accounting standards contain more detailed provisions about what the financial statements should look like compared to the Code of Obligations. Recognized and practically relevant in Switzerland are the accounting standards Swiss GAAP FER, IFRS, and US GAAP.

Swiss GAAP FER

The Swiss GAAP FER is an accounting standard designed for small to medium-sized Swiss companies operating nationally. Non-profit organizations and pension funds are also target audiences for Swiss GAAP FER. The purpose of the Swiss GAAP FER framework is to enable a recognized annual financial statement that accurately reflects the actual financial position, performance, and cash flows of an organization. At the same time, the relatively streamlined framework ensures that SMEs are not administratively burdened by the preparation of the financial statements.  

IFRS

The International Financial Reporting Standards (IFRS) are internationally recognized accounting standards issued by the International Accounting Standards Board (IASB). Since 2005, European companies listed on a European exchange are required to prepare financial statements according to this standard. Although Swiss companies are not subject to the IAS regulation of the EU, more than half of the Swiss companies still adopt this framework. The IFRS standards are much more comprehensive than Swiss GAAP FER and are mainly used by publicly traded companies.

US GAAP

Last but not least, the United States Generally Accepted Accounting Principles (US GAAP) are also relevant for Switzerland. These are the accounting principles of the United States, developed to better inform current and potential capital investors. They apply to all companies that are listed directly or through a subsidiary on an American exchange.

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