Luxembourg’s accounting law has modernized, have you?

Luxembourg’s accounting law has modernized, have you?

Bill of Law concerning accounting, annual financial statements, consolidated financial statements and related reports of undertakings and abolishing the function of “commissaire”

On 28 July 2023, the Minister of Justice introduced the Bill of Law n°8286 (the New Draft Law). The New Draft Law modernizes the Luxembourg accounting law by making it more readable, better structured and properly articulated. It also recognizes and provides a sound accounting basis for certain market practices well established among Luxembourg professionals. From the announcement of the New Draft Law in July 2023, the legislative process to implement into national law is expected to take approximately one to two years, with the Law thereafter being applicable either with immediate effect or after a predetermined period. The Law is therefore anticipated to come into effect towards the end of 2024 or in 2025.

To help, our IFRS and LuxGAAP technical desk in Luxembourg has developed a report, containing an overview, detailed analysis and expert insights on the New Draft Law, available in both summary format (Factsheet) and long-form report (Report).

Download the New Draft Law brochure

Factsheet             Report

 

12 key changes laid out in the Draft Law

  1. A filing requirement for S.C.Sp.s
  2. An audit requirement for "large holding companies"
  3. New numerical thresholds for small, medium and large-sized entities/groups and adoption of  the “micro- undertaking” as a  new category of undertaking
  4. A measurement option for intangible assets with indefinite useful life
  5. A concept of agent vs. principal in the context of control
  6. Deferred tax asset recognition option
  7. A modernization in the content of the accounting provisions filling certain gaps, embedding into law certain Q&As from the Commission des Normes Comptables (CNC Q&As)
  8. The abolition of the current “art. 27” of the Title II of the Law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of undertakings - exemption regime - which is proposed to be applicable to consolidated financial statements only
  9. The abolition of the function of commissaire (supervisory auditor) in commercial companies’ law
  10. A modernization of the accounting regime for undertakings dissolved and put into liquidation
  11. A modernization in the form through a “single accounting law”
  12. The extension of the undertakings in scope of the application of the single accounting law

 

How EY can help

EY can support you in building and managing an effective and efficient finance function with a range of accounting, reporting and analytics services. 

In the context of the New Draft Law, EY can help with:

  • Trainings and workshops
  • Assistance in gap or impact analysis and implementation phase
  • Assistance in improving your existing reporting mechanisms as per IFRS and LuxGAAP
  • Accounting compliance and reporting services
  • Audit services for new undertakings with financial statements that the New Draft Law requests to be audited