Advanced Search

Amendments To The Law "on The Annual Accounts Of Companies"

Original Language Title: Grozījumi likumā "Par uzņēmumu gada pārskatiem"

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$40 per month.
The Saeima has adopted and the President promulgated the following laws: the amendments to the law "on the annual accounts of companies" make law "Of the annual accounts" (the Republic of Latvia Supreme Council and Government Informant, 1992, 44/45.nr.; The Saeima of the Republic of Latvia and the Cabinet of Ministers rapporteur, 1995, no. 8; in 1996, no 24; in 1998, nr. 6, 21; 2000, no. 2; 2001, no. 9) the following amendments: 1. Replace the entire law, the word "Finance" with the word "financial".
2. Add to the introductory "terms used in the law" with terms and their explanations in the following wording: "fair value is the amount for which an asset could be exchanged, or a liability transaction between knowledgeable, willing and financially independent persons.
The balance sheet value is the amount at which an asset or liability in the balance sheet.
The trading portfolio is the company name and business of financial instruments held (including contract, commodity-based) set of companies heading there to trade or buy, to soon earn a profit from the actual or impending purchase and the sales price variance or other price or interest-rate variations, and positions that the company purchased to limit the risks of the trading portfolio.
A financial asset is an asset that is cash or from the contract, the right to receive cash or another financial asset from another enterprise or to exchange financial instruments with another company under conditions potentially beneficial or other equity instruments of the company.
Financial liabilities are the obligations arising from the agreement to transfer cash or another financial asset to another enterprise or to exchange financial instruments with another company under conditions potentially beneficial.
Held for trading financial assets or financial liabilities are financial assets or financial liabilities which are acquired or incurred principally for profit from short-term price fluctuations, as well as financial assets, regardless of the reason for the acquisition is part of a set of assets, for which it is known that it recently actually used for short-term profit.
Held-to-maturity investments are financial assets with fixed or determinable payments and fixed maturity that the company decided to hold to maturity and the ability to end and not loans and claims.
Loans and claims are financial assets that are created by the company, the money or other lending assets or selling goods and services to pay for other, later period (on credit) directly to the debtor, and not any financial assets, which would have to be sold immediately or in the short term.
Available-for-sale financial assets are financial assets that are neither a loan nor claims not held-to-maturity investments nor held for trading financial assets.
Hedge accounting is a system of one or more hedging instruments for hedge accounting purposes, so this change in fair value of instruments, in full or partially offset the risk items in fair value or cash flow.
From the risks provided in the item is active, the commitment, firm commitment or forecast transaction that put the future of the company's change in the fair value or future cash flows of exchange risk and hedge accounting purposes is given as to the risk hedged item.
Hedging instruments is hedging accounting system contains the derived financial instruments or other financial assets or financial liabilities that the fair value or cash flow is intended to compensate for specific risks to ensure the item fair value or cash flow.
The terms used in the law, "financial instruments" and "derivative financial instruments" correspond to the law on the financial instruments market used terms. "
3. Express article 1 by the following: "article 1 (1) this law applies to Latvia registered merchants, businesses and business organizations, including non-profit organisations established in the form of businesses and companies, regardless of their form of business and type of property (hereinafter referred to as the company).
(2) this Act does not apply to individual economic operators, individual (family) enterprises, farmers and fishermen, farm income from economic transactions of the previous reporting year exceed 45 000 lats.
(3) this Act does not apply to banks, credit unions, insurance companies in the form of a limited company, cooperative mutual insurance associations, private pension funds, investment companies and investment management firms.
(4) company, which conduct reinsurance business, prepare an annual report of the financial and capital market Commission, the provisions of which are binding on the insurance companies in the form of shares of the company. "
4. in article 3: make the first paragraph by the following: "(1) the annual report must cover 12 months, and usually coincides with the calendar year. Different reporting year beginning and end can be only if it determines the company's articles of association or partnership agreement of the (partnership). ";
to make a fifth by the following: "(5) the review of the year in which the company reorganize or it ceases its activities, as well as the year in which the home is changed, it can be shorter than 12 months."
5. To make article 4 second subparagraph by the following: "(2) the annual report shall be drawn up according to the law" on accounting ", this law and other laws. The Cabinet of Ministers issued the rules on the cash flow statement and statement of changes in equity of dialing arrangements, as well as the received State, local, foreign, European Community, other international organizations and institutions, financial aid (financial assistance), donations and donations in cash or in kind, reflected in the financial statements. "
6. Express article 10 by the following: ' article 10 balance sheet accounts active in long-term investments i. intangible assets: 1. the company's development costs.
2. Concessions, patents, licenses, trademarks and similar rights.
3. other intangible assets.
4. the company's goodwill.
5. Advance payments for intangible investments.
II. assets: 1. Land, buildings and structures and permanent plantations.
2. Long term investments leased assets.
3. Equipment and machinery.
4. other fixed assets and inventory.
5. create the fixed asset under construction object.
6. Advance payments for fixed assets.
III. Long-term financial investments: 1. Investments in the capital of undertakings.
2. Loans to affiliated companies.
3. the participation of associates in the capital.
4. Loans to associated companies.
5. other securities and investments.
6. Other loans and other long-term receivables.
7. Own shares.
8. Loan to the company's shareholders and management.
Current assets i. stocks: 1. Raw materials and consumables.
2. Work in progress.
3. Finished goods and goods for sale.
4. Incomplete orders.
5. Advance payments for goods.
6. Working animals and productive animals.
II. customers: 1. Trade receivables.
2. Affiliated companies.
3. Associate companies.
4. Other debtors.
5. Not paid in shares in the company.
6. Short term loans the company's shareholders and management.
7. deferred costs.
8. the accrued revenue.
III. Short-term financial investments: 1. Investments in the capital of undertakings.
2. Own shares.
3. other securities and participation kapitālo.
4. Derivative financial instruments.
Iv. Money.
Liabilities to equity: 1. Shares or capital (share capital).
2. share (part of) the premium.
3. the long term investment revaluation reserve.
4. Financial instruments revaluation reserve.
5. Reserve: a) the legal reserve;
b) reserve own shares or shares;
c) statutory reserve;
d) other reserves.
6. Retained earnings: a) previous years retained earnings;
(b)) for the year retained earnings.
Savings: 1. Provisions for pensions and similar obligations.
2. Deferred income taxes.
3. Other provisions.
Long-term creditors: 1. Borrowing against bonds.
2. loans convertible into shares.
3. Loans from credit institutions.
4. Other loans.
5. advance payments received From customers.
6. Payables to suppliers and contractors.
7. bills of Exchange Payable.
8. Debt to affiliated companies.
9. Debt to associated companies.
10. taxes and State social security payments.
11. Other creditors.
12. Deferred income.
13. dividends for the year.
14. paid dividend of the previous years.
Short-term creditors: 1. Borrowing against bonds.
2. loans convertible into shares.
3. Loans from credit institutions.
4. Other loans.
5. advance payments received From customers.
6. Payables to suppliers and contractors.
7. bills of Exchange Payable.
8. Debt to affiliated companies.
9. Debt to associated companies.
10. taxes and State social security payments.
11. Other creditors.
12. Deferred income.
13. dividends for the year.
14. paid dividend of the previous years.

15. Accrued liabilities.
16. Derivative financial instruments. "
7. Express article 11 paragraph 6 by the following: "6. Staff costs: (a) remuneration for work;)
(b)) of the company's pension funds;
c) State social security payments;
(d)) the other social security costs. "
8. Make article 13, part of the "cost" of paragraph 3 by the following: "3. Staff costs: (a) remuneration for work;)
(b)) of the company's pension funds;
c) State social security payments;
(d)) the other social security costs. "
9. Article 18: Supplement to the second part of the article as follows: "(2) research costs are not capitalized. The company's development costs can include intangible investments in the balance sheet under "development costs" only if all the following conditions are true: 1) the company intends to complete the asset to use the company's own use or sold;
2) is possible to the company to complete this active object, and then have access to adequate technical, financial and other resources to complete the asset and use the company's own use or sold;
3) company can demonstrate (show), some economic benefits from the use of this asset or sales will be received in the future;
4) company can reliably assess the cost of this asset. ";
believe the current text of article about the first part.
10. Express article 19 of part two of the first sentence by the following: "provisions may not exceed the amount required, and should not be used for the adjustment of the value of the assets."
11. Turn off the second subparagraph of article 26 of the third sentence.
12. off 33 and 34 article.
13. Replace article 37, third paragraph, the word "the" with the word "same".
14. Replace article 40 in numbers and the words "in article 52 and 54" with numbers and words "52, 54 and 55.4 article".
15. in article 46: Add to the article with the second and third subparagraphs by the following: "(2) if it is not used in article 55.1 of the Act on the choice of financial instruments to apply the evaluation at fair value in the annex provides explanations on derivative financial instruments and the nature of the instrument, by groups, indicating the book value and fair value, if you can identify with any of this law, the first paragraph of article 55.2 of the following methods.
(3) if it is not used in this law article 28 provided for in the second paragraph of the choice to apply the value of this law article 55.1 in the fourth paragraph above long-term financial investments the fair value of which is less than the book value, the annex provides information on individual assets or groups of assets book value and fair value, explaining why it is not suitable for the write-down, and indicating the facts that show that the decrease in value is temporary, and temporary circumstances occurred. ";
believe the current text of article about the first part.
16. To make article 50 the second subparagraph by the following: "(2) the management of the company functions assigned rewards total shows the breakdown of the individual position groups (e.g., the Management Board, the members of the Executive or the Administration, Managing Director). The same applies to pensions and similar obligations to former members of the governing bodies. "
17. in article 54: replace the first part of the numbers and the words "in article 46, 49 in the first and third part" with a number and the words "the third paragraph of article 49.";
turn off the sixth.
18. Article 55: make the first paragraph by the following: "(1) the management report on the basis of financial statement analysis, include clear information on the development of the company and its current financial position, as well as information about relevant risks and uncertain conditions, with which the company faced and which had an impact on its financial position and financial performance the year under review. The company, which the above two of this law, the second subparagraph of article 54, in addition to the management reports provide information about the environment influence if it is essential for the company's assets, liabilities, financial position and profit or loss. "
Add to the second part of paragraph 5 with the following: "5) the use of financial instruments and, where this is relevant to the company's assets, liabilities, financial position and profit or loss, the financial risk management objectives and policies the risk management policy for each major type of forecasted transaction for the future, which applies hedge accounting, and the company's exposure to price risk, credit risk , liquidity risk and cash flow risk. ";
turn off the sixth.
19. To supplement the law with the 7.1 as follows: section "7.1 Chapter Evaluation of the fair value rule 55.1 (1) by way of derogation from this law, 26, 28, 29, 30, 32 and 36. the assessment provided for in article terms financial instruments (including derivative financial instruments) may be evaluated at fair value, provided that you comply with the second, third and fourth conditions contained in part.
(2) commodity-based contracts and under which both parties have the right to settle in cash or some other financial instrument within the meaning of this law, derivative financial instruments, except when all the following conditions are true: 1), the contract has been concluded in accordance with the company's planned, goods, raw materials and consumables, the purchase, sale or usage requirements and still matches;
2) contract was originally intended for the part referred to in paragraph 1;
3) contractual obligations is supposed to take delivery of the goods.
(3) the Assessment of the fair value apply only to those financial liabilities, which are part of the portfolio of trade or which has arisen from derivative financial instruments.
(4) the assessment of fair value is not under such financial assets: 1) held-to-maturity investments, other than derivative financial instruments;
2) loans and claims which are not held for trading;
3) participation in the Group subsidiaries, associates and jointly manage the company, the company's equity capital issued securities and other financial instruments, which are not financial assets held for trading or available-for-sale financial assets or which are not quoted on an active market and which the market price of the fair value cannot be determined reliably.
(5) in addition to the first part of this article in fair value may appreciate any financial assets or financial liabilities item that qualified as a risk item, or provide a particular part of such a position, if necessary, in accordance with the company adopted hedge accounting system.
Article 55.2 (1) assessment of financial instruments the fair value of this law, in the cases referred to in article 55.1 must be reliable. Assessment is plausible, if the fair value of financial instruments is determined using one of the following methods: 1) financial instruments, which are published in the price quotes in public assets in the stock market, based on market price. If the financial instrument is not that market prices, but such is the price of the individual components or similar financial instruments, this instrument can create market prices, given its components or similar financial instruments market price;
2) financial instruments for which it is not possible to determine the market price, based on a value calculated by using generally accepted and appropriate valuation models and techniques where the calculated value reasonably reflect this instrument possible market price.
(2) financial instruments whose fair value cannot be determined reliably with the first part of this article, these methods, evaluate this law, 26, 28, 30, 32 and 36. in accordance with the procedure laid down in article.
Article 55.3 (1) financial instruments the fair value of the changes which have occurred during the evaluation of this Act in accordance with the first subparagraph of article 55.2 methods provided, include in the statement of income, except in the following cases: 1) financial instrument is classified as hedging instruments, and in accordance with the company adopted hedge accounting system is designed for some (or all) of the changes in the value of this instrument is not a profit and loss statement;
2) change in the value of financial instruments is dependent on currency exchange in connection with the company's cash long-term investments under the jurisdiction of a foreign company's share capital. In both these cases the financial instrument's fair value changes shows the balance sheet item "financial instruments revaluation reserve".
(2) available-for-sale financial assets fair value change when these assets are not derivative financial instruments the company optionally included in the income statement or the balance sheet shows the item "financial instruments revaluation reserve".
(3) financial instruments revaluation reserve shown in the balance sheet under "financial instruments revaluation reserve", included in the income statement in the same period in which the financial instrument is sold, deleted or otherwise alienated or which impaired the value of financial assets.
55.4 article

If financial instruments are measured at fair value, the annex shall contain the following information: 1) major assumptions on which is based the assessment model used and the choice of methods, if the fair value of those instruments in accordance with this law, the first paragraph of article 55.2 (2);
2) fair value of financial instruments and the changes that are included in the income statement or the balance sheet item "financial instruments revaluation reserve" by the following categories of financial assets: loans and claims (a)), b) held-to-maturity investments (c)) available-for-sale financial assets, (d)) financial assets held for trading or financial liabilities;
3) by financial derivatives groups — the explanation of these tools, specifying the amount, as well as information about the significant terms and conditions that may affect the future expected cash flow amount, timing and certainty;
4) table, which shows the balance sheet item "financial instruments revaluation reserve" in the year of change. "
20. Article 61 of the expression as follows: "article 61 (1) the annual report shall show the following: 1) company name (merchant business) and legal address and the registration number in the trade register or the register of enterprises;
2) individual (family) business, farmers or fisherman's farm, the owner's name, surname, personal code and residence;
3 individual traders also) merchant name, surname, personal code and residence;
4) partnership (partnership), its way personally responsible companion (partnerships complementary actors) and the NUW appear jointly name, surname, personal code and residence, but a legal person — name, registration number and registered office;
5) Corporation (incorporated companies), well on its way, the members of the Executive Board members (if it was created by the Council) and the auditor's name, surname, personal code, place of residence and profession. This information is also provided for those individuals who review the year gone from these posts.
(2) the financial statements and the management report shall be signed by the following persons: 1) the individual company, farmer or fisherman's farm, where the annual accounts of the company or the owner or other official, who registered in the register of companies entitled to represent the individual business, farmers or fisherman's farm. Family company signature of family member who represents a family business owners, or other official, who registered in the register of companies of the right to represent the family business;
2) annual report the individual merchant, merchant or other person that is notarized special authorisation to sign the report;
3) partnerships (partnerships) annual report — all the members (participants) are they public members (participants), which are specifically authorized to represent the company;
4) Corporation (incorporated companies) annual report — the members of the Executive and Council members (if it was created by the Council) or the Managing Director (Executive Body of the company is a member).
(3) if any of the other parts of this article 3 and 4 persons referred to in paragraph considers that the financial statement or management report is not approved, or if it has any objections, this person is their differing views, you can specify the particular note. "
21. Article 62: replace the first part of the word "company" with the words "Corporation (incorporated companies)";
replace the third paragraph, the word "company" with the words "Corporation (incorporated companies)."
22. Replace article 63 in the second and third paragraph, the words "company" with the words "Corporation (incorporated companies)."
23. Article 66 of the turn in the third paragraph, the word "third".
24. Make the second subparagraph of article 67 of the second sentence as follows: "in this case, the sworn auditor's report shall not be published, but the publication shall state, or sworn auditor, there have been complaints or remarks or he is given a negative opinion or refused to give an opinion."
25. the transitional provisions be supplemented with points 3 and 4 by the following: "3. Article 1 of the law of the third part relating to investment brokerage companies and investment management firms, starting with a review of the year 2005".
4. Until the date of the coming into force of amendments to the law "on investment firms", with the term "investment management company" shall mean the term "investment company". "
26. To supplement the law with the informative reference to European Union directives as follows: "Informative reference to European Union directives, the law includes provisions arising from the Directive 78/660/EEC, 83/349/EEC, 84/569/EEC, 89/666/EEC, 90/604/EEC, 90/605/EEC, 94/8/EC, 1999/60/EC, 2001/65/EC and 2003/51/EC. '
Transitional provisions with this law amendments applicable to annual reports, starting with the reference year 2004.
The Parliament adopted the law of November 20.
The President of the Parliament instead of the President i. Otter Riga 2003 11 December