Accounting

In Switzerland, corporations can be financed through cash contributions or contributions in kind, with the latter needing to meet certain requirements such as balance sheet eligibility. Contributions in kind require additional founding documents and checks, but can bring valuable assets into the company.

Swiss companies are legally required to maintain accounting records in accordance with the Code of Obligations, the format of which depends on their revenue and legal form. Legal entities and companies with a turnover exceeding CHF 500,000 maintain double-entry accounting, while others use single-entry accounting.

Employers must charge a deductible private share of 10.8% annually of the vehicle purchase price when providing a company car for the employee. This amount is subject to social security contributions and documented in the salary statement.

The income statement compares revenues and expenses to determine a company's profit. It serves to monitor financial performance and aids in decisions for increasing profitability.

Depreciation distributes the loss in value of fixed assets through direct or indirect methods. Both methods intentionally record depreciation in order to provide a clear picture of the financial situation.

In Switzerland, a ten-year retention period for accounting records such as business books and audit reports is legally required, with business books also allowed to be stored digitally. However, digital archiving requires demonstrable immutability of the data to meet legal requirements.

Fixed assets are activated upon purchase and depreciated over their useful life either on a straight-line or declining balance basis. Straight-line depreciation distributes the costs evenly, while declining balance depreciation decreases annually.

Hidden reserves arise from the undervaluation of assets or the overvaluation of liabilities, thus concealing equity. They reduce the reported profit and can be tax-advantageous.

Profitability ratios such as gross and profit margin show how efficiently companies generate profits from business activities. Gross margin measures the return after direct costs, while profit margin indicates net profitability.