New CNC Q&As eCDF / PCN - New layouts Investment Property

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New CNC Q&As eCDF / PCN - New layouts Investment Property  

14 July 2016

Regulatory News Alerts

Q&A 16/010 on new layouts of Balance Sheet and P&L

Accompanying the Law of 18 December 2015 which implements the new Accounting Directive, the Grand-Ducal Regulation of 18 December 2015 prescribes the layouts of Balance Sheet and P&L for financial year starting on or after 1 January 2016. The CNC points that the standardised chart of accounts (PCN) has not been updated according to these new provisions at this stage, but a new PCN version is in progress and should be available by the end of 2016.

The CNC Q&A 16/010 considers practical questions relating to the newly introduced layouts and accounting rules, the differences with the former layouts, and the non-alignment of the standardised chart of accounts. It also provides transition tables between 2015 and 2016 layouts.

The questions and answers are summarised below:

Q&A CNC 16/010 "eCDF/PCN - New layouts of Balance Sheet and P&L" 

Questions

Answers

Q1 – General approach regarding the new layouts for Balance Sheet and P&L

Limitation as much as possible of gaps between Luxembourgish and EU layouts.

Q2 - Mains differences between former and new layouts/rules

    - Research expenses; no more possibility to recognise as assets, only as expenses

    - Own shares, no more possibility to classify as fixed assets, only as current assets

    - Other reserves, which include the fair value reserve.*Plus-values immunisées” shall now be also recognised under the caption “other unavailable reserves”.

    - Scope’s clarification of “Other transferable securities and other financial instruments” caption

    - Removal of the caption “Subordinated debts”

    - Mandatory vertical layout for the P&L

    - Removal of the captions “Extraordinary income/charges” (disclosures in notes required for significant extraordinary items)

    - Other amendments related to inventories, staff expenses, financial results and reversal of value adjustments.

Q3 - Transition from 2015 to 2016 layouts and comparative figures

Transition tables between 2015 and 2016 layouts are proposed in appendix to this Q&A

Q4 – Figures presentation convention

    - Balance sheet: no change

    - P&L: Credit balances shall be always presented as positive amounts, and debit balances shall be always presented as negative amounts


 

Q&A 16/006 on Investment Property

This Q&A aims to provide details on the accounting treatment of investment property under LuxGAAP and LuxGAAP + Fair Value option (mixed accounting regime). According to Article 64sexies of the Law of 19 December 2002, as amended, entities whose annual accounts are established under LuxGAAP + Fair Value option can measure at fair value their investment property. The Q&A covers:

  • Definition of investment property
  • Accounting classification of investment property
  • Recognition, valuation and presentation under LuxGAAP (Cost model)
  • Recognition, valuation and presentation under LuxGAAP + Fair Value option (permission to use fair value)

The CNC opines that the FV model on investment property should be applied in accordance with IAS 40 as adopted by the European Union. The Q&A clarifies also the treatment of the unrealised and realised gains/losses, and the recognition of deferred taxes.

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