Are you ready for the new Grand Ducal Regulation of 12 September 2019? For all financial statements starting 1 January 2020, the Luxembourg standard chart of accounts (PCN) is shedding its old skin! Forms are available under the following link.
The new PCN triggers about 1,500 changes to the previous standard chart of accounts, which pervade all classes of accounts. While many software developers have embedded automatic conversion features in their accounting solutions, some changes will be left out. For instance, the new PCN splits a number of captions into several other new captions, which means manual adjustments will have to be made, for instance financial assets (including shares), new accounts to distinguish land and buildings in Luxembourg and in other jurisdictions, different types of real estate properties, etc.
Some regular accounts have even been struck off, such as the well-known interest account (41113) which were not relevant to national statistics, which may prompt professionals to create subdivisions to principal accounts if helpful to the company. Likewise, the new PCN streamlines creditor accounts and reduces their number while introducing new accounts to record derivative instruments. A new account was even created for overdrafts. Operating expenses and turnover accounts were fleshed out so as to reflect business models in a more accurate fashion. Long awaited accounts were added that now allow accountants to record positive fair value adjustments in a specific account.
The transition from the previous version of the PCN to the new one is strewn with many pitfalls and potential errors, which could derail your reporting and create inconsistencies, JW Partner stands at the ready to help you navigate these changes and integrate them in a seamless fashion. Reach out to us to find out more!