Swiss Accounting Standards: Swiss GAAP FER, Obligationenrecht and IFRS Explained

Most Swiss companies keep their books solely under the Swiss Code of Obligations (Obligationenrecht, OR Art. 957–963b, in force since 1 January 2015); only listed companies, cooperatives with at least 2,000 members and foundations subject to ordinary audit must additionally report under a recognised standard such as Swiss GAAP FER, IFRS, IFRS for SMEs, US GAAP or IPSAS — and any shareholder group holding at least 20% of the share capital can demand one. Which financial statements an AG or GmbH must prepare, and when an audit becomes mandatory, then depends on size, listing status and whether the entity has a duty to consolidate. Swiss accounting law establishes a three-tier framework that scales requirements to the economic significance of the entity. This guide explains all three tiers, the Swiss GAAP FER standard set, the audit thresholds, the comparison with IFRS, and the practical obligations that apply to a typical Swiss company from day one.

Swiss Accounting Law: OR Art. 957–963b

The revised Swiss financial reporting law (Rechnungslegungsrecht) entered into force on 1 January 2015, replacing the previous accounting provisions of the OR with a unified, size-proportionate framework. The reform modernised Swiss accounting significantly: it introduced the cash flow statement as a mandatory component for large companies, required enhanced disclosure in the notes, mandated the use of a recognised standard for consolidated accounts, and aligned Swiss law with international best practice while preserving the distinctive Swiss approach to financial reporting.

The provisions governing accounting and financial reporting run from OR Art. 957 to OR Art. 963b. These articles apply to all legal entities with registered offices in Switzerland — AG, GmbH, cooperatives, associations, and foundations — as well as to sole proprietorships and partnerships above specified revenue thresholds. The scope of the obligation varies by entity type and size, but the underlying principle is that any entity carrying on commercial activity must maintain adequate accounting records to allow an accurate assessment of its financial position.

OR Art. 957 establishes the baseline obligation: all entities subject to commercial bookkeeping requirements must keep orderly books of account and prepare annual financial statements. OR Art. 958 defines the components of a standard set of financial statements: a balance sheet (Bilanz), an income statement (Erfolgsrechnung), and a notes section (Anhang). OR Art. 961 adds further requirements — cash flow statement and management report — for companies subject to ordinary audit. OR Art. 962 requires certain entities — listed companies, cooperatives with at least 2,000 members, and foundations subject to ordinary audit — to prepare their individual accounts under a recognised financial reporting standard, and lets shareholders representing at least 20% of the share capital demand one. OR Art. 963 governs the duty to consolidate, and OR Art. 963b requires entities with a consolidation duty to prepare group accounts under a recognised standard (Swiss GAAP FER, IFRS, IFRS for SMEs, US GAAP or IPSAS).

Three Accounting Tiers: Simplified, Standard, and Enhanced

The OR structures accounting obligations across three tiers based on entity type, revenue, and size. Each tier carries distinct requirements for record-keeping, financial statement preparation, and audit.

For most newly formed Swiss AG and GmbH — start-ups, SMEs, and single-purpose holding companies — Tier 2 applies from the moment of incorporation. The company must maintain proper books, prepare an annual balance sheet and income statement, and file the required tax declaration. Transition to Tier 3 occurs automatically when the company exceeds the ordinary audit thresholds in two successive financial years, or when a statutory consolidation duty arises.

Swiss GAAP FER: Framework and Standard Set

Swiss GAAP FER (Fachempfehlungen zur Rechnungslegung) is Switzerland's nationally developed financial reporting standard. It is issued and maintained by the Foundation for Accounting and Reporting Recommendations (Stiftung für Fachempfehlungen zur Rechnungslegung), an independent private-law foundation established under Swiss law. The standard applies the true-and-fair-view principle: financial statements prepared under Swiss GAAP FER must give a reliable and understandable picture of the entity's assets, liabilities, financial position, and results.

Swiss GAAP FER is organised as a modular system. The overarching Framework sets out the fundamental principles — going concern, accruals, consistency, materiality, and comparability — that govern all Swiss GAAP FER financial statements. The Framework is followed by the individual recommendations — 25 in force as of 2026, numbered up to FER 41 with several numbers unused. The standard set is structured in three layers:

• ●Core FER (Framework + FER 1–6): Must be applied by all entities using Swiss GAAP FER. Smaller entities — those that do not exceed two of the three thresholds of CHF 10 million total assets, CHF 20 million revenue and 50 full-time positions in two successive years — may limit their reporting to the Framework and these six core standards.
• ●Topic-specific FER (FER 10–28): Apply to specific transactions and balance sheet items. Include standards on intangible assets (FER 10), income taxes (FER 11), leases (FER 13), related party transactions (FER 15), pension obligations (FER 16), inventories (FER 17), tangible fixed assets (FER 18), impairment (FER 20), long-term contracts (FER 22), provisions (FER 23), equity and shareholder transactions (FER 24), and government grants (FER 28).
• ●Group and listed company FER (FER 30–31): FER 30 governs consolidated financial statements; FER 31 adds supplementary requirements for companies listed on the SIX Swiss Exchange. The revised FER 30 entered into force on 1 January 2024.

Industry-specific standards exist for pension funds (FER 26), derivative financial instruments (FER 27), non-profit organisations (FER 21), insurance companies (FER 40–41), and real estate investment vehicles. A revised FER 16 (pension benefit obligations) was adopted in December 2025 and is effective from 1 January 2027.

Who Must Apply Swiss GAAP FER

Swiss GAAP FER is not mandatory for every Swiss company. A recognised standard is required in two distinct situations: for individual (statutory) accounts under OR Art. 962, and for consolidated group accounts under OR Art. 963b. In both cases the entity may choose between Swiss GAAP FER, IFRS, IFRS for SMEs, US GAAP, or IPSAS. In practice, Swiss GAAP FER is the most widely chosen standard among Swiss-based companies that are not required by foreign investors or cross-border listing rules to apply IFRS.

The entities that must apply a recognised standard — for their individual accounts under OR Art. 962, and, where they head a group, for their consolidated accounts under OR Art. 963b — are:

• ●Listed companies: Companies whose equity securities are listed on a stock exchange, where the exchange so requires. This duty attaches to the individual accounts under OR Art. 962 even where the company has no subsidiaries; if it also heads a group, its consolidated accounts fall under OR Art. 963b. As of 2026, Swiss GAAP FER is a large and growing minority choice on the SIX Swiss Exchange, while IFRS remains the most common standard, particularly among larger and internationally oriented groups.
• ●Large cooperatives: Cooperatives with at least 2,000 members must apply a recognised standard for their individual accounts under OR Art. 962, and for their group accounts under OR Art. 963b where they have a consolidation duty.
• ●Foundations subject to ordinary audit: Foundations that are required by law to undergo an ordinary audit must prepare their individual accounts under a recognised standard (OR Art. 962), and their group accounts under OR Art. 963b where relevant. Swiss GAAP FER 21 provides specific guidance for charitable non-profit organisations.
• ●On shareholder demand: Shareholders representing at least 20% of the share capital (or 10% of the members of a cooperative, or 20% of the members of an association) may demand financial statements under a recognised standard even where none of the categories above applies (OR Art. 962 para. 2).
• ●Voluntary adoption: Any Swiss company may voluntarily adopt Swiss GAAP FER even if not legally required. Common reasons include preparation for a future IPO, improved investor communication, or compliance with requirements of a corporate parent that already applies the standard.

A private (unlisted) Swiss AG or GmbH with no subsidiaries, no 20% shareholder demand, and no consolidation duty is not required to apply Swiss GAAP FER, IFRS, or any other recognised standard — its individual financial statements are governed exclusively by OR Art. 957–963. The recognised-standard obligation is therefore the exception, not the rule: it is triggered by listing, entity type, a minority-shareholder request, or a group structure, not by size alone.

Swiss GAAP FER vs IFRS vs OR: Comparison

Foreign founders and CFOs frequently ask which standard applies and whether Swiss companies need IFRS. The answer depends on the company's listing status and consolidation duty. The table below maps the three frameworks across the dimensions that matter most to a Swiss operating company or holding structure.

For a typical Swiss start-up or SME with no listing plans and no subsidiaries, OR individual accounts apply and Swiss GAAP FER is not required. As the company grows, crosses the ordinary audit threshold, and eventually acquires subsidiaries, the consolidation duty under OR Art. 963 will arise and Swiss GAAP FER becomes the most cost-effective compliant choice for group reporting. Companies seeking access to international capital markets or required to report to a foreign IFRS-reporting parent will need IFRS regardless of size.

Audit Thresholds: Ordinary Audit, Limited Audit, and Opt-Out

Swiss audit law distinguishes three levels of statutory audit: ordinary audit (ordentliche Revision), limited audit (eingeschränkte Revision), and no audit (Verzicht auf Revision). The applicable level depends on the company's size and the consent of its shareholders.

The ordinary audit (OR Art. 727) applies when a company exceeds two of the following three thresholds in two consecutive financial years:

• ●Total revenue exceeding CHF 40 million (net revenue from sales of goods and services)
• ●Total assets exceeding CHF 20 million (balance sheet total at year-end)
• ●Average annual headcount of 250 or more full-time equivalents

Companies subject to ordinary audit must engage a licensed audit firm (Revisionsunternehmen) accredited by the Federal Audit Oversight Authority (RAB/FAOA). The ordinary audit must be conducted by a licensed auditor-in-charge (Leitender Revisor) with RAB accreditation. Companies required to consolidate are automatically subject to ordinary audit regardless of whether they meet the size thresholds.

Companies that do not meet the ordinary audit thresholds are subject to a limited audit under OR Art. 727a. The limited audit is narrower in scope than an ordinary audit: the auditor performs analytical procedures, plausibility checks, and inquiries rather than a full substantive examination. A licensed audit expert (zugelassener Revisionsexperte) is not required for a limited audit — a licensed auditor (zugelassener Revisor) suffices.

Small companies may opt out of even the limited audit entirely (OR Art. 727a para. 2). The opt-out requires two conditions: (1) the company has fewer than 10 full-time equivalents on average over the financial year, and (2) all shareholders unanimously consent to waive the audit. The opt-out must be documented and the waiver noted in the commercial register. Companies that have opted out remain fully subject to OR bookkeeping and financial reporting obligations — only the external audit is removed.

A shareholder holding at least 10% of the company's share capital may request an upgrade to ordinary audit at any time (opting-up). Conversely, a company currently subject to ordinary audit may revert to limited audit once it has remained below two of the three thresholds for two consecutive financial years. These transitions are procedurally simple but require a board resolution and, where relevant, an update to the commercial register entry.

Accounting Currency and Foreign Currency Translation

OR Art. 958d governs the currency in which Swiss companies must prepare their financial statements. The basic rule is that financial statements are presented in the national currency — Swiss francs (CHF) — or in the functional currency of the company's primary business operations. A company whose primary business is conducted in euros, US dollars, or another currency may prepare its books and financial statements in that functional currency, subject to the requirement to also provide a CHF translation.

Where a foreign functional currency is used, the financial statements must present both the functional-currency figures and their CHF equivalents. The translation to CHF is performed at the closing exchange rate for balance sheet items and at either the closing rate or the average rate for income statement items, depending on the method chosen. The exchange rates applied and the method used must be disclosed in the notes.

Following the Swiss company law reform in force since 1 January 2023, the share capital of a Swiss AG or GmbH may now be denominated in a foreign currency rather than only in CHF. This is particularly relevant for international holding structures that wish to report and capitalise in EUR or USD. The minimum share capital requirements (CHF 100,000 for AG, CHF 20,000 for GmbH) remain expressed in CHF-equivalent terms for the purposes of the commercial register and tax law, even where the capital is denominated in a foreign currency.

For tax purposes, Swiss cantonal and federal tax declarations must be submitted in CHF. A company preparing its statutory accounts in a foreign functional currency must therefore translate the relevant figures to CHF for tax filing. The method of translation for tax purposes is governed by circular letters issued by the Swiss Federal Tax Administration (ESTV/AFC) rather than by OR Art. 958d alone.

Record Retention: The 10-Year Rule

OR Art. 958f establishes a mandatory ten-year retention period for all accounting records. The scope of the retention obligation is broad: it covers the books of account (Geschäftsbücher), booking vouchers and receipts (Buchungsbelege), business reports (Geschäftsberichte) — including the annual financial statements — and audit reports. The ten-year period runs from the end of the financial year in which the last booking entry was made into a particular record.

The retention obligation covers records in all formats. Accounting records may be retained in paper form or as electronic documents, provided the electronic records remain legible, tamper-evident, and accessible throughout the retention period. Swiss law does not mandate a specific document management system, but the records must be capable of retrieval within a reasonable time in the event of a tax audit, legal proceeding, or regulatory enquiry.

Key points about the ten-year rule:

• ●The period is counted from the end of the financial year in which the last entry was made, not from the date of the document itself. A contract entered into in 2016 but still generating entries in 2024 must be retained until the end of 2034.
• ●The obligation survives dissolution: where a company is liquidated, the liquidator must ensure that accounting records are preserved for the full retention period. In practice, records are typically deposited with a professional fiduciary or a document storage service.
• ●Premature destruction of records is a criminal offence under the Swiss Criminal Code (StGB Art. 325, improper keeping of business records), punishable by a fine; in the context of bankruptcy or debt-enforcement proceedings it can be prosecuted more severely under StGB Art. 166. It may also constitute an offence under Swiss tax law.
• ●The ten-year period is a minimum. Certain records — such as real property deeds, long-term contracts, and pension plan records — may need to be retained for longer under other applicable law, including Swiss direct tax law (DBST/LIFD) and cantonal tax law.

Practical Accounting Compliance for a Swiss AG or GmbH

For the majority of newly formed Swiss AG and GmbH companies, the practical compliance picture is straightforward. Tier 2 (standard bookkeeping under OR Art. 958) applies from day one. The company must maintain proper double-entry bookkeeping, close its accounts annually, and prepare a balance sheet, income statement, and notes. The financial year-end is chosen by the founders and entered in the articles of association; 31 December is common but not mandatory.

A Swiss GmbH or AG with fewer than 10 FTE and unanimous shareholder consent may opt out of the limited audit. This is the most common configuration for single-shareholder holding companies and small operating companies. The opt-out reduces compliance costs materially: as of 2026, professional audit fees in Switzerland typically range from CHF 3,000 to CHF 20,000 for a limited audit of a small company, depending on complexity and canton.

Companies approaching the ordinary audit thresholds — particularly those with revenue approaching CHF 40 million or headcount approaching 250 — should engage their external accountant to monitor threshold status at each year-end. Crossing two thresholds in one year triggers the ordinary audit obligation for the following year, requiring a timely auditor appointment. Failing to appoint an auditor when legally required is a compliance breach that the commercial registry authority can address through administrative proceedings.

For accounting, tax, and CFO support services for Swiss companies, see our accounting service, the overview of Swiss corporate tax, and the CFO-as-a-Service offering for companies that need a senior finance function without a full-time hire.

Goldblum & Partner AG has provided accounting, tax, and legal advisory services to Swiss and international companies from Baarerstrasse 25, 6300 Zug since 2007. Our team assists with bookkeeping setup, audit engagement, Swiss GAAP FER adoption, and the ongoing financial reporting obligations that arise as companies grow through the OR tier framework. Contact us to discuss your accounting structure.

Legal note: OR thresholds and audit requirements are stated as of the law in force from 1 January 2015. Swiss GAAP FER standard numbers and effective dates reflect the 2025 edition issued by the Foundation for Accounting and Reporting Recommendations; verify current editions at fer.ch. CHF threshold amounts should be verified at admin.ch before reliance. This article does not constitute legal or tax advice.