Luxembourg: Preparing for the new Standard Chart of Accounts
by Jean-Luc Squifflet, Senior Consultant, Sigma Conso
The future Luxembourg Standard Chart of Accounts (PCN or “plan comptable normalisé”) shall apply from the financial years beginning on January 1st 2020 or during the calendar year 2020. This new Chart of Accounts has an impact on the Group Chart of Accounts used for consolidation in Luxembourg. The Group Accounting Departments should prepare for this as early as this fall.
The upgrade of the Chart of Accounts aims, among other things, to make articulation between the accounts of the balance sheet and the accounts of the profit and loss statement more intuitive, to align the classification of the accounts with the heading under which they are.
As a result of the Grand-Ducal Regulation of 18 December 2015, the category of non-recurring income and expense has been eliminated and the presentation of the profit and loss account has undergone a major reorganization. The presentation of the balance sheet has been modified to a lesser extent.
What will change
The change in the Standard Chart of Accounts (PCN) is significant and it is necessary to prepare for it the best possible way. New accounts will be created, existing accounts will be split, which involves breaking down the existing amounts into several accounts
What are the advantages of the future Luxembourg Chart of Accounts?
By allowing a more intuitive articulation between the accounts of the general balance in “PCN” format and the layout of the balance sheet and the profit and loss statements, this new “PCN” is a very good thing.
How to best prepare for it?
It will be necessary to pay attention to the following aspects: certain accounts have been deleted, others have merged, or are more detailed; it will therefore be necessary to be able to explain the transition between old and new chart of accounts in terms of amounts, balances, and to do this, we advise you to use the transition table published by the Commission for Accounting Standards and to carry out a detailed documentation of the transition for impacted accounts, account-by-account
Four tips for a successful transition to the new chart of accounts
- anticipate the transition, plan ahead;
- analyze the impacts;
- ideally carry out the transition in 2019 (at the level of the consolidated accounts) to be able to consolidate the 2019 accounts according to the new accounting system;
- use the detailed documentation provided by the Commission des Normes Comptables (CNC).
At Sigma Conso, we are adapting our standard (starter kit) to achieve compliance with the future chart of accounts. We are also preparing a detailed documentation explaining to our clients how to proceed in the Sigma Conso Consolidation & Reporting software application and we are ready to support them in this critical and exceptional transition phase.
Contact us today to find out more: – Tel. + 352 27 02 01 20 – E-mail: firstname.lastname@example.org
Note: the article was published in PaperJam, in French. You can read it here.