- Sole proprietorship with sales in excess of CHF 500,000 are required to keep accounts in accordance with the Swiss Code of Obligations, including a balance sheet.
- Corporations and LLC are required to keep accounts in accordance with the Swiss Code of Obligations, including a balance sheet.
- The balance sheet comprises 2 categories: assets and liabilities.
- Assets and liabilities are always equal
What should a balance sheet in Switzerland contain?
In Switzerland, the balance sheet is structured according to the guidelines of the Code of Obligations (CO), which defines the minimum requirements for its presentation. It is composed of two main sections: assets (left column) and liabilities (right column), each divided into categories.
Balance sheet items in Switzerland
The balance sheet comprises assets (fixed and current) and liabilities (equity, short- and long-term liabilities). An example of a Swiss balance sheet follows.
Example of a Swiss balance sheet
- Assets
- Liabilities
- Current assets
Items held for use or conversion into cash in the short term
- Cash and cash equivalents
- Accounts receivable
- Merchandise stock
- Semi-finished and finished products
- Fixed assets
Durable assets held by a company to support its business over the long term
- Long-term loans
- Machines
- Furniture and fittings
- Vehicles
- Patents
- Operating property
- Short-term foreign funds
Company debts due within less than 1 year.
- Bank debt
- Trade payables
- VAT due
- Dividends
- Long-term liabilities
Company debts payable within more than 1 year
- Mortgages
- Long-term borrowings
- Provisions
- Shareholders' equity
Financial resources belonging to company owners
- Own shares
- Legal reserve from capital
- Profit or loss carried forward
- Profit or loss for the year
- Total assets
- Total liabilities
Current assets
In accounting, the current assets include the components of a company's assets that are intended to be used or converted into cash in the short term, typically within a year. Current assets consist of volatile elements that are essential to the company's operating cycle.
The main components of current assets are :
- Stocks : include raw materials, work-in-progress and finished goods for sale.
- Trade receivables : represent amounts owed by customers to the company following the sale of goods or services.
- Treasury : includes cash on hand or in bank accounts.
Effective management of current assets helps to ensure the company's liquidity and solvency, as it reflects its ability to meet short-term financial obligations. Regular analysis of these elements helps optimize working capital.
Fixed assets
Fixed assets include durable goods that a company owns and uses for its business on the long term. These assets make a lasting contribution to the company's production and value creation.
Non-current assets are not intended to be sold or consumed quickly, and fall into three main categories:
- Property, plant and equipment : tangible assets such as land, buildings, machinery, vehicles, furniture, etc.
- Intangible assets : intangible assets such as patents, licenses, trademarks, software, goodwill, etc.
- Financial assets : long-term financial investments such as shareholdings, long-term loans, guarantee deposits, etc.
Short-term liabilities
These debts form part of the liabilities side of the balance sheet, and are closely linked to the financing requirements of operating activities. Their proper management is essential to maintaining a healthy cash position and ensuring that the company can meet its short-term obligations. They comprise several main categories:
These debts form part of balance sheet liabilities and are closely related to financing requirements operating activities. Managing them properly is essential to maintaining a healthy cash position and ensuring that the company can meet its short-term obligations. They fall into several main categories:
- Accounts payable : These are amounts owed to suppliers for the purchase of goods or services required for operations. These debts are generally settled within 30 to 90 days.
- Short-term borrowings : They include bank financing or loans obtained to meet short-term cash flow requirements. These loans often bear interest and must be repaid within the year.
- Tax and social security liabilities : These obligations include taxes due (such as VAT and corporation tax) and social security contributions payable to public or private bodies for employees.
- Accrued liabilities : Includes accrued expenses and deferred income.
Long-term liabilities
Long-term liabilities refer to a company's debts and financial obligations with a repayment term that exceeds one year.
They form part of the liabilities side of the balance sheet and are mainly used to finance investments or long-term capital requirements. These funds enable the company to carry out medium- and long-term projects without immediately calling on its own resources. They generally comprise the following items:
- Long-term bank borrowings : loans granted by banks to finance investment projects such as the purchase of machinery or buildings, or the development of new activities.
- Bonds issued : Borrowing funds from investors in exchange for securities. These bonds have a fixed term, often over one year, and earn interest until they are redeemed.
- Provisions for liabilities and charges : Amounts set aside to meet probable future commitments, the timing or precise amount of which are uncertain.
How do you organize a balance sheet?
To organize an accounting balance sheet clearly and legibly, it's essential to follow a precise structure that will facilitate understanding and financial analysis. Here's how to proceed:
Organization of assets
First will come highly liquid assets, which are immediately available resources, such as cash and bank balances, which already constitute cash.
Next, the short-term liquid assets are added, including accounts receivable and other short-term receivables, which can be converted into cash within a short timeframe.
Finally, long-term fixed assets include durable goods such as land, buildings, machinery, and patents, which take longer to sell or monetize, resulting in limited liquidity.
Organization of liabilities
The liabilities are listed in order of payability, i.e. how quickly the company must repay them. The most urgent debts are listed first.
First, then, we find short-term liabilities, due within the year, such as trade payables, short-term borrowings, and social security charges and taxes to be settled quickly.
Then there are long-term liabilities, such as long-term bank loans, bonds issued, or provisions for contingencies and losses. These debts are generally repaid over several years.
Frequently Asked Questions
Who has to keep a balance sheet?
Under article 957 of the Swiss Code of Obligations, sole proprietorships with sales in excess of CHF 500,000 are required to keep full accounting records, including a balance sheetA simplified set of accounts is sufficient for companies with lower sales. For those with lower sales, simplified accounting, recording only revenues, expenses and assets, is sufficient.
Swiss accounting software can simplify bookkeeping and the generation of balance sheets.
How is a balance sheet structured?
The balance sheet is divided into two main sections:
Assets: what the company owns.
- Current assets cash flow, accounts receivable, inventories.
- Fixed assets tangible fixed assets (machinery, equipment), intangible fixed assets (patents, licenses, etc.) and intangible assets (property, plant and equipment).
Liabilities : what the company owes.
- Short-term borrowings: Trade payables, short-term borrowings.
- Long-term liabilities: long-term bank loans.
- Shareholders' equity: The company's assets: entrepreneur's contributions, retained earnings.
