LIAA

Site map Questions

	lv en ru jp cn
	Why Latvia? Investment Opportunities Latvian Business Guide FDI Track Record Human Resources Business Infrastructure Incentives for investors Operating environment Financial environment Taxation Trade and Customs Accounting and Auditing Quality of Life and Recreation State aid programmes for 2007–2013 Meet the Investment Team Investment Project Assessment Form

Invest in Latvia / Latvian Business Guide / Accounting and Auditing

Accounting

Accounting and bookkeeping in Latvia are regulated by the Law on Accounting, which states that accounts must reflect all of a company’s economic transactions and all changes in the state of the company’s property so that a third person qualified in the area of accounting may obtain a true and clear representation of the financial position of the company.

Accounting registers must be maintained in the Latvian language and kept together with source documents in the territory of Latvia. If a foreign legal or natural person participates in the economic transactions, another language may be used. Companies, except for individual merchants and farms whose revenues in the previous financial year did not exceed LVL 200 000, must maintain accounting registers using a double entry accounting system. All source documents, accounting registers and other documents related to the company’s accounts must be kept in the company’s archive for a period between 5 and 75 years, depending on the type of the respective documents.
Companies commencing activities and in the future, at the end of each accounting year, must carry out an inventory, in which all the property owned by the company is assessed on site, as also are the amounts of debtor and creditor claims and obligations. Based on the initial inventory data, companies must draw up an opening balance sheet.

The accounting year usually coincides with the calendar year. The first accounting year for newly established companies may not exceed 18 months. Companies may change their accounting year if appropriate explanations are provided. Where the financial year is different from the calendar year, this should be stated in companies’ Articles of Association.

Annual financial reporting

Companies, cooperatives, individual merchants and farms registered in Latvia must prepare annual financial reports in accordance with the Annual Accounts Law if revenue in the previous financial year exceeded LVL 200 000. Annual financial reports consist of a financial report and a report by the company’s management. Companies can choose not to prepare cash flow statements, statements of changes in equity, to not calculate and report deferred tax assets and obligations, and may prepare shortened annexes, if the company does not exceed two of the following conditions:

total value of balance sheet – LVL 250 000
net turnover – LVL 500 000
average number of employees in the accounting year – 25

Reports by company management must provide information about the development of the company, financial results, also the main risks and uncertain conditions faced by the company.

The annual financial reports prepared by companies who exceed two of the above criteria, also if transferable securities issued by a company are admitted to trading in the regulated market of a Member State, must be audited by a sworn auditor in accordance with the Law on Sworn Auditors.

Companies must submit their annual financial report together with the sworn auditor’s report (if such exists) to the SRS no later than a month after approval of the annual financial report and no later than four months after the end of the accounting year.

Additional information at:
www.vid.gov.lv
www.fm.gov.lv