The Law of 10 December 2010 relating to the introduction of international accounting standards for undertakings and transposing into Luxembourg Law the provisions of Directives 2009/49/EC (consolidated accounts) and 2006/46/EC (annual accounts and consolidated accounts of companies, banks and insurance undertakings) was adopted by the Luxembourg parliament and published in the Luxembourg Official Journal (the Mémorial) on 17 December 2010.
– IFRS principles: a new option for undertakings
The main new measure introduced by the present law is the possibility for Luxembourg undertakings to prepare their annual statements in accordance with the International Financial Reporting Standards (“IFRS”) principles. However, the Law of 2010 offers only an option for undertakings and does not replace the Luxembourg Generally Accepted Accounting Principles (“GAAP”), in accordance to which undertakings may still prepare their annual or consolidated accounts. In such a case, the undertakings have now the opportunity to value financial instruments and other asset classes at “fair value”.
– Exemptions threshold increased
By amending the law of 19 December 2002 concerning, amongst other, the accounting and annual accounts of companies, the law of 2010 has increased the thresholds required for the appointment of an approved statutory auditor (réviseur d’entreprises agréé) and the one required for the establishment of consolidated accounts.
Therefore, an undertaking which does not meet, at the date of the closure of the financial year, two of the following criteria, is exempted from the obligation of appointing an approved statutory auditor:
o Balance sheet total : EUR 4.4 million;
o Net turnover: EUR 8.8 million; and
o Average number of full-time staff employed during the financial year: 50
Please note that under the law of 2002, these criteria were respectively: EUR 3.125 million, EUR 6.25 million and 50.
In a same way, an undertaking which does not meet, at the date of the closure of the financial year, two of the following criteria, is exempted from the obligation of preparing consolidated accounts:
o Balance sheet total : EUR 17.5 million;
o Net turnover: EUR 35 million; and
o Average number of full-time staff employed during the financial year: 250
Please note that under the law of 2002, these criteria were respectively: EUR 12.5 million, EUR 25 million and 50.
To avoid any doubt, it is important to remember that undertakings listed on a regulated market would not benefit from these exemptions.