The annual closing (or year-end closing) is the crucial step that concludes each financial year. It consists of closing the accounts at the closing date, making accrual and adjustment entries, and producing the definitive financial statements: balance sheet, income statement and notes.
In Switzerland, the annual closing is a legal obligation for all companies registered in the commercial register (art. 958 CO). It is also a key moment for evaluating company performance, preparing the tax return and planning the following year.
Calendar and legal deadlines
Meeting deadlines is essential to avoid tax and corporate penalties. Here is the typical calendar for a financial year ending on 31 December:
| Deadline | Action | Legal basis |
|---|---|---|
| 31 December | Financial year closing date (or other chosen date) | Art. 958 CO |
| January - March | Closing work, closing entries, preparation of financial statements | Art. 958 CO |
| March - April | Audit of accounts by the auditing body (if applicable) | Art. 727 ff. CO |
| Before 30 June | Approval of accounts by the general meeting | Art. 699/808b CO |
| 31 March (extendable) | Filing of tax return (standard deadline, extendable to 30 November in Geneva) | Cantonal tax law |
| 30 days after the GM | Filing of accounts with the commercial register (if capital company subject to publication) | Art. 697h CO |
Note: The financial year does not necessarily have to correspond to the calendar year. Some companies choose a closing date of 30 June, 30 September or another date. The first financial year may exceptionally last up to 18 months.
Steps of the annual closing
1. Verification of current accounting
Before making closing entries, it is essential to ensure that the bookkeeping for the year is complete and correct:
- All purchase and sales invoices are recorded
- Bank reconciliations are completed for all accounts
- Payroll entries are complete (including December)
- VAT returns for the year are reconciled
- The cash account balance corresponds to the physical count
2. Physical inventory
Companies holding inventory must conduct a physical inventory at the closing date. The inventory must be documented and valued at acquisition or production cost, taking into account any impairments.
3. Accrual entries
Accrual entries (or adjustments) ensure that income and expenses are allocated to the financial year to which they relate (matching principle):
| Entry type | Description | Example |
|---|---|---|
| Accrued expenses | Expenses of the year not yet invoiced | Legal fees for ongoing litigation |
| Accrued income | Income of the year not yet invoiced | Work completed in December, invoiced in January |
| Prepaid expenses | Expenses paid in advance for the following year | Insurance premium paid in advance |
| Deferred income | Income received for future services | Annual subscription received in advance |
| Depreciation | Reduction in value of fixed assets | Depreciation of furniture, vehicles, machinery |
| Provisions | Probable but uncertain expenses | Provision for litigation, warranty, taxes |
| Bad debt allowance | Impairment of doubtful receivables | Flat-rate or individual allowance |
4. Depreciation
Fixed assets (furniture, vehicles, machinery, IT equipment, buildings) must be depreciated annually. The tax authorities publish accepted depreciation rates that serve as references:
| Asset category | Rate on book value | Rate on acquisition cost |
|---|---|---|
| Office furniture | 25% | 12.5% |
| IT equipment | 40% | 20% |
| Vehicles | 40% | 20% |
| Machinery and equipment | 30% | 15% |
| Buildings | 4% | 2% |
| Goodwill | 40% | 20% |
| Patents, licences | 40% | 20% |
5. VAT reconciliation
It is essential to reconcile the revenue declared for VAT with the revenue shown in the income statement. Any discrepancy must be justified (exempt services, corrections, etc.). The FTA may request this reconciliation during an audit.
6. Tax calculation
A provision for taxes must be established in the accounts for corporate income tax (federal, cantonal and municipal) and capital tax. In Geneva, the effective tax rate on profits is approximately 14.7%. See our guide on corporate income tax for details.
7. Preparation of financial statements
Once all closing entries are made, the definitive financial statements are prepared:
- Balance sheet: snapshot of the company's assets and liabilities at the closing date
- Income statement: summary of income and expenses for the year, resulting in profit or loss
- Notes to the accounts: additional information on accounting methods, detail of certain items and off-balance sheet commitments
Minimum content of the notes to the accounts
Article 959c CO defines the minimum content of the notes:
- Valuation principles applied
- Commitments to pension institutions
- Amount of liabilities from leasing contracts not recognised on the balance sheet
- Details of sureties, guarantees and pledges in favour of third parties
- Amount of assets pledged as security for debts
- Significant events occurring after the closing date
- Reasons for early resignation of the auditing body
Large companies subject to ordinary audit must provide additional information (art. 961a CO).
The AX-Fiduciaire process for annual closing
Our closing process is structured and proven:
- Preparation (January): collection of final documents, verification of accounting completeness, inventory
- Closing entries (January-February): accruals, depreciation, provisions, VAT reconciliation
- Preparation of accounts (February): production of balance sheet, income statement and notes
- Quality review (February-March): internal review by a second expert
- Delivery and discussion (March): presentation of accounts to the client, explanation of results and points of attention
- Audit coordination (March-April): provision of the file to the auditing body if applicable
- Tax return (March-June): preparation and filing of the tax return
Deliverables from our annual closing
Upon completion of the closing, you receive a complete file comprising:
- Signed balance sheet and income statement
- Notes to the accounts
- General ledger and trial balance
- VAT reconciliation
- Depreciation schedule
- Statement of provisions
- Complete tax return (income tax, capital tax, anticipatory tax if applicable)
- Summary note with recommendations
Special cases
First financial year
The first financial year of a newly formed company may last up to 18 months. For example, a company formed in July 2025 may close its first financial year on 31 December 2026.
Change of closing date
It is possible to change the financial year closing date, subject to approval by the general meeting and the tax authorities. The transitional period may not exceed 18 months.
Loss of capital and over-indebtedness (art. 725-725b CO)
Since the corporation law reform that came into force on 1 January 2023, the law distinguishes three situations. Art. 725 CO requires the board of directors to permanently monitor solvency. Art. 725a CO (loss of capital) applies when half of the share capital is no longer covered: the board of directors must take remedial measures. Art. 725b CO (over-indebtedness) requires notification to the court if no realistic restructuring plan is feasible within a reasonable period.
AX-Fiduciaire tip: Do not delay your annual closing. The sooner you close your accounts after year-end, the more time you have for tax planning and preparation of the general meeting.
Need help with your annual closing? Request a free quote and benefit from the expertise of our certified accountants.