Understanding the new Luxembourg Standard Chart of Accounts

On 23 September 2019, the Grand-Ducal Decree of 12 September 2019 (“GDD”) that determines the new Luxembourg Standard Chart of Accounts (“SCA”, “PCN” or “plan comptable normalisé”) was published in the Luxembourg Official Journal. The GDD replaces the 2009 decree that established the first SCA.

Application date

The new SCA is applicable to financial years beginning on or after 1 January 2020. It’s applicable to nearly all commercial companies which are obliged to keep accounting records and draw up and file annual accounts, with a few exceptions1.

What will the new SCA aim to do?

The new SCA provides a number of improvements and clarifications. The new SCA isn’t a complete transformation, but it draws upon lessons from the original GDD and intends to address the main concerns users expressed during the 2014 public consultation process undertaking by the Commission des Normes Comptables (“CNC”).

The overall objective of the SCA renewal was to better meet the needs of companies and public users. The new SCA is focused on simplifying administrative formalities and increasing the technological aspect in order to reduce the risk of errors.

How does this differ to the old SCA?

The new SCA aims, among other things, to improve accounting information traceability and simplifying the annual accounts preparation process. The new SCA now includes a compulsory mapping table for completing the balance sheet and profit and loss account (“P/L”). The mapping table is customisable and can be changed based on the requirements of individual companies. As a result of the Grand-Ducal Regulation of 18 December 2015, the category of non-recurring income and expense has been eliminated. The presentation of the P/L has undergone a significant restructuring while the presentation of the balance sheet has been revised to a lesser extent. Furthermore, some accounts of the SCA have been added, deleted, merged or split.

The new SCA, the related validation rules and the mapping tables are already available on the eCDF website (in English, French, and German). However, the final implementation and activation in production of the new SCA will only occur as of 4 January 2021.

The CNC issued a comparison between the 2009 SCA and the 2020 SCA, available in English, French, and German, where contact details of the mailboxes opened by the CNC and the National Institute of statistics and economic studies of the Grand Duchy of Luxembourg (STATEC) to communicate any issues or questions can also be found.

Preparing for Luxembourg’s the new SCA

Companies will have to modify their current SCA to align it to the new SCA. It’s therefore essential to confirm that their current accounting software can support the new SCA in order to ease the transition. New accounts would have to be created and existing accounts would have to be split, which involves breaking down the existing accounts (and related amounts) into several accounts. It’s of vital importance that companies keep record of the transition. It’s subsequently advisable that companies use the transition table published by the CNC to carry out a detailed documentation of the transition for impacted accounts on an account-by-account basis.

Some tips to assist with a successful transition to the new SCA:

• Confirm that your accounting software can support the new SCA
• Plan the transition steps and anticipate the time the change would require
• Check the CNC website for new or updated guidance.

If you have any queries regarding the new SCA implementation, please get in touch with one of our experts.