Hello, Mr Gomez,
Yes, you are right. Small and medium enterprises follow the Swiss Code of Obligations also known as Obligationenrecht in German, while large companies turn to Swiss Generally Accepted Accounting Principles and/or IFRS for accounting standards. The difference between two sets of rules could be formulated in one question: whose interest should be safeguarded? The Code of Obligations prioritizes creditors of the company. Swiss GAAP and IFRS focus on shareholders.
Thank you for the clarification, Mr. Underwood. Very interesting!
What about taxation? Are there any differences in how Obligationenrecht and IFRS treated from a tax point of view?
Yes, there are. Only OR can serve as a basis for tax reporting. Other accounting standards are not relevant for this purpose.
I see. How much detail should a report include if it is elaborated according to OR?
Usually financial statements elaborated according to OR are not very detailed. They contain enough information to report a firm's tax liability or apply for a bank loan. But they are not sufficient for public companies traded at the stock market.
Hello again!
I have a question about accounting terminology. Could you please explain the difference between accounting and bookkeeping? Thank you.
Hi!
Bookkeeping is a record of business transactions during a certain period. Its is based on uniform principles and includes such instruments as ledger and journal.
Accounting is a process of creating main business reports - a balance and an income statement. These are prepared at the end of an accounting period. The aim is to ensure meaningfulness and comparability of the financial statements.
Good afternoon, Mr Underwood,
I'm very grateful for your expert answers. These help me understand the industry better.
Could you please comment on the underlying principles of accounting?
My pleasure, Mr Gomez.
The underlying principles of accounting do not change much from one country to another. Accounting is built on completeness of information, truth in records, evidence of every transaction. Clarity and expediency are essential because all records must be verifiable.
Mr Gomez
The entries are done on the basis of material evidence. This can include receipts, invoices, bills, bank account statements and so forth. The job of an accountant is to correctly identify inflows of revenues and outflows of costs and assign them to respective accounts. The double-entry principle of bookkeeping (each entry is reflected in two corresponding accounts) is a safeguard from mistakes.
Which documents are included in a financial statement of a small or medium enterprise?
Hi!
Typical financial statements of a medium enterprise would include a balance sheet, profit and loss statement, and notes to the financial statements. The latter is mandatory for sole proprietorship businesses only if they meet the criteria for medium enterprises, for example, turnover figures.
Hi, Mr Underwood,
How would you describe the fundamentals of accounting?
The fundamentals of accounting include the going concern principle and the need to make time and factual delimitations.
What does the going concern principle mean?
It means that a company is expected to be in business at least for the next twelve months.
And what about time and factual delimitations?
Expenses and income must be delimited in terms of time and subject, i.e. those are recorded according to the period and cause.
Hallo
Hier kann man noch weitere Informationen dazu finden:
https://accounting-forum.ch/d/147-einnahmen-ausgabenrechnung-oder-doppelte-buchf-hrung
Gruss
Lana
