Accounts

Validation date: 05/2010

Legal requirements

Accounting in Latvia is governed by EU law, national law and regulations of the Cabinet of Ministers.

The key text governing accounting is the Accounting Law. It applies to all business subsidiaries of foreign companies and permanent representative offices. Under it, the Accounting Council organises and oversees all Latvian accounting standards.

  • The Law on Accountinglatviešu
  • Accounting Councillatviešu
  • Accounting Council Regulationlatviešu

All Latvian and EU-registered businesses, except banks and certain other financial institutions and insurance companies are subject to the Law on Annual Reports.

  • The Law on Annual Reportslatviešu

The general principles for preparing the annual reports of banks and other financial institutions and insurance companies are laid down by:

  • The Law on Credit Institutions
  • The Law on Credit Unions
  • The Law on Investment Management Companies
  • The Law on Private Pension Funds
  • The Law on Insurance Companies and their supervision
  • The Law on Reinsurance
  • The Law on the activity of insurance and reinsurance intermediaries
  • The rules and regulations of the Finance and Capital Market Commission (for more information, please go to the "legal texts" section).

Single-entry accounting

Under the law the single entry accounting in Latvia may be used by individual businessmen, sole proprietorships, farms and fisheries, where the business turnover declared in the previous annual report does not exceed 200 000 lats. Single entry accounting procedures are regulated by the Cabinet Regulations No. 1160.

  • Cabinet Regulations No. 1160latviešu

Double-entry accounting

Double entry accounting involves entering the transaction amount in two linked accounts: one on the left side of the account - debit, the other on the right side of the account - credit. This form of accounting applies to all enterprises registered in Latvia, apart from the exceptions stated in the Law on Accounting.

Inventory

When starting up the business the company should perform inventory, stating all company property and property used by the company, as well as comparing company and debtor and creditor demands and liability sums. Inventory results should be disclosed in the inventory lists. In future such inventory should be performed at the end of each accounting year as well as when ceasing company activity, reorganising it or in cases when the company is going to be declared bankrupt.

  • Company annual report documentslatviešu

Administrative procedures

Annual reports or consolidated annual accounts should be submitted to the State Revenue Service and be accompanied by the certified auditor's report. The State Revenue Service electronically sends the documents to the Commercial Register. The Enterprise Register must make the documents received public.

  • Register of Certified Auditorslatviešu
  • State Revenue Service
  • Commercial Registerlatviešu
  • Information on submitting reports on the State Revenue Service websitelatviešu

Document storage

All company source documents, accounting registers, inventory lists, annual accounts and their annexes, as well as accounting organisation documents should be arranged and kept in the company archives.

The Law on Accounting states that the time period for keeping the documents shall be as follows:

  • For or annual accounts and their appendixes, and for the general ledger - 10 years. After that they shall be submitted to the State Archives.
  • For inventory lists, accounting registers and accounting organisation documents - 10 years.
  • For source documents regarding monthly salaries (remuneration) calculated for employees, arranged by years and months - 75 years.
  • For other source documents - 5 years.

In cases where the company ceases activities, the liquidation commission, co-ordinating with the Office of the Director General of the State Archives, shall determine the procedures for the subsequent storage of the archives of the company. The head of the company shall be responsible for maintenance of the archives of the company.

Resources

The Ministry of Finance is the leading state administration institution in finance field, developing finance policies, coordinating and organising their implementation, e.g. general accounting policy.

  • Ministry of Financelatviešu

The State Revenue Service is a direct administration institution under the Minister of Finance aiming to attain development of a fair tax system, reduce administrative expenses etc.

The Finance and Capital Market Commission is a competent, autonomous institution regulating and monitoring the activity of Latvian banks, credit unions, insurance companies and insurance intermediaries, participants of the financial instruments market and private pension funds.

  • Finance and Capital Market Commissionlatviešu

The aim of the Latvian Association of Certified Auditors is to implement the professional autonomy of certified auditors as well as maintain their professional image and legal protection. The Association strives to carry out tasks laid down in the Law on Certified Auditors.

The Virtual Club of Accountants is a website created by a private incentive, collecting the information necessary for accounting and providing advice and guidance.

  • Virtual Club of Accountantslatviešu

Legal texts

  • 14.10.1992. The Law on Accounting (Zinotajs, 44, 12.11.1992.)latviešu
  • 14.10.1992. The Annual Accounts Law (Zinotajs, 44, 12.11.1992.)latviešu
  • 19.10.2006. The Law on Consolidated Annual Accounts ("LV", 178 (3546), 08.11.2006.)latviešu
  • 03.05.2001. The Law on Certified Auditors ("LV", 78 (2465), 22.05.2001.)latviešu
  • 05.10.1995. The Law on Credit Institutions ("LV", 163 (446), 24.10.1995.)latviešu
  • 29.03.2001. The Law on Credit Unions ("LV", 60 (2447),latviešu
  • 18.12.1997. The Law on Investment Companies ("LV", 342/345 (1054/1057), 30.12.1997.)latviešu
  • 20.11.2003. The Financial Instruments Market Law ("LV", 175 (2940), 11.12.2003.)latviešu
  • 05.06.1997. The Law on Private Pension Funds ("LV", 150/151 (865/866), 20.06.1997.)latviešu
  • 10.06.1998. The Law on Insurance Companies and Supervision Thereof ("LV", 188/189 (1249/1250),latviešu
  • 17.03.2005. The Law on the Activity of Insurance and Reinsurance Intermediaries ("LV", 52 (3210), 01.04.2005.latviešu

Still need help?

Accountants in Latvia are certified by the Accountants' Association of the Republic of Latvia where you can find the list of certified accountants.

  • Accountants' Association of the Republic of Latvialatviešu
  • List of certified accountantslatviešu

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Last update: 31/10/2010 | Top