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Ministry of Finance
of the Republic of Latvia
1 Smilsu st., Riga
LV-1919, Latvia

P.: +371-67095405
F.: +371-67095503
E-mail: pasts@fm.gov.lv
info@fm.gov.lv

State Policy in the Field of Accounting

General information

Latvian accounting requirements are governed by national laws and regulations.

The Law on Accounting is the main law in the field of accounting and applies to all companies, co-operative societies, branches of foreign entrepreneurs as well as non-residents (foreign entrepreneurs), associations and foundations, political organizations (parties) and their associations, religious organizations, trade unions, institutions which are financed from the state budget or local budgets, state or governmental agencies, as well as other legal and natural persons carrying out economic activity.

Law on Accounting states that accounts shall reflect all of a undertaking’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 shall maintain in the Latvian language, in the euro and keep together with source documents in the territory of Latvia.

Head of the undertaking is liable for the maintaining of the accounting (for a capital company – the company board).

Accounting registers shall maintain using a double entry accounting system.

The single entry accounting system may be used by:

  • individual merchants, individual enterprises, farming and fishing enterprises whose turnover (income) from the economic activities in the previous accounting year does not exceed 300 000 euro and other natural persons who perform economic activities;
  • associations, foundations, trade unions and religious organisations whose turnover (income) from the economic activities in the previous accounting year does not exceed 40 000 euro.

Annual financial reporting

Requirements for financial reporting are set out in the Annual Accounts Law and the Consolidated Annual Accounts Law.

Commercial companies, co-operative societies registered in Latvia, European economic interest groups, European co-operative societies and European commercial companies registered in Latvia irrespective of their type of activity or the volume of their turnover shall draw up annual accounts in accordance with provisions specified in the Annual Accounts Law.

The Law on Consolidated Annual Accounts applies to commercial companies and co-operative societies registered in Latvia if they are parent companies of a group of companies

The Annual Accounts Law and the Consolidated Annual Accounts Law do not apply to banks, savings and loan societies, insurance commercial companies in the form of stock companies, mutual insurance co-operative societies, private pension funds, investment broker companies and investment management companies. Requirements for the annual accounts and consolidated annual accounts of banks and other financial institutions, and for insurance and reinsurance companies are prescribed in the instructions and regulations of the Finance and Capital Market Commission

International accounting standards

Latvia requires the use of the International Accounting Standards and the International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the EU (IFRS) in the consolidated financial statements of undertakings listed to a regulated market (the Baltic Main list and the Baltic Secondary list) and financial institutions.  Financial institutions and undertakings listed on Baltic Main list are required to use IFRS in annual financial statement.

Latvia permits the use of IFRS in the consolidated financial statements of non-publicly traded undertakings.

Audit thresholds

The audit is required for financial institutions, listed companies and undertakings exceed at least two of the three following criteria:

  1. a balance sheet total of 400 000 EUR,
  2. a net turnover of 800 000 EUR and
  3. an average annual number of employees  during the reporting financial year - 25. 

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CONTACTS

Tālrunis uzziņām: 67095405

Lietvedības tālrunis: 67095578

Fakss: 67095503

E-pasts: info@fm.gov.lv

Adrese: Smilšu iela 1, Rīga, LV-1919, Latvija