Accounting

Depreciation can be recorded directly on the fixed asset account or indirectly through an allowance account, whereby the balance sheet shows the book value or acquisition cost depending on the method. With the direct method, the depreciation is recorded directly on the machinery account, with the indirect method on an allowance account.

Two methods of depreciation: straight-line with a constant annual amount and declining balance with a decreasing annual amount. The basis is acquisition value, useful life, and salvage value.

Depreciation spreads the costs of fixed assets over their useful life to correctly present the balance sheet and profit and loss statement. Impairments arise from wear and tear and technological progress.

In double-entry accounting, every business transaction is recorded in both debit and credit, which double-confirms the success of the company. Each entry must show the same profit or loss in the balance sheet and income statement.

Accounting serves as a central information tool for internal (management, board of directors) and external recipients (shareholders, creditors, public), with the former having full and the latter only limited access to insights. Different accounting rules are applied in financial reporting, leading to differences between the internal and external presentation of the financial situation such as the "hidden reserves".

Companies registered in the commercial register and sole proprietorships with an annual turnover of more than CHF 100,000 are required to keep accounts. Accounting includes the complete and accurate recording of business transactions as well as the preparation of the balance sheet and income statement.

Good accounting software for start-ups should be modular and offer introductory courses as well as telephone support. It must guarantee ease of use and expandability for invoicing and payroll.

The management of accounting in one's own company depends on prior knowledge; without prior knowledge, an accounting course is recommended. With a commercial background, the accounting can be managed by oneself.

The obligation to keep accounts depends on the obligation to register in the commercial register, not on the registration itself; for sole proprietorships, this obligation begins with a turnover of CHF 100,000. Companies such as general partnerships, LLCs, and corporations must keep accounts regardless of turnover.