Accounting Law

The Accounting Law establishes the fundamental principles for the preparation of financial statements for companies, associations, and organizations in Latvia. This law, which is an integral part of the Latvian accounting system, serves as the foundation for maintaining and disclosing financial information, while also providing the necessary information to national and international regulatory authorities for monitoring the financial position and operations of companies by setting forth uniform accounting principles.

The new Accounting Law came into effect on January 1, 2022, entirely replacing the previous Law On Accounting. The aim of the Accounting Law was to improve the regulation of accounting in comparison to the previous law by ensuring its compliance with legal technical requirements, supplementing the law with clear definitions of its objectives and scope, and providing for the revision of the Cabinet of Ministers’ regulations previously issued under the former law.

The Accounting Law also incorporates the previous regulations regarding the licensing of outsourced accountants and the introduction of the outsourced accountant registry.

Below is a brief overview of the structure of the Accounting Law, including its chapters and subsections:

I. Chapter: General Provisions

Defined Terms in the Law
Objectives of the Law
Entities Subject to the Law
Accounting Tasks
Accounting Oversight
General Requirements for Organizing Accounting
Measurement Bases in Accounting

II. Chapter: Accounting Registers and Supporting Documents

General Provisions for Organizing Accounting Registers
Language Used in Accounting Registers
Double-Entry and Single-Entry Accounting System
Supporting Documents

III. Chapter: Inventory

IV. Chapter: Annual Report and Other Statements

Annual Report
Opening Balance Sheet
Additional Regulations for Clarity of Regulation
- Economic Activity Report
- Closing Financial Report
- Debtor’s Balance Sheet and Financial Report of a Legal Person in the Insolvency Process
- Special Regulations for Economic Operators
Start, End, and Duration of the Reporting Year

V. Chapter: Storage of Accounting Documents

Regulations for the Storage of Accounting Documents
Location for Storing Accounting Documents
Period for Storing Accounting Documents
- Period for Storing Annual Reports, Inventory Lists, Accounting Registers, and Accounting Organization Documents
- Period for Storing Supporting Documents for Employee Salary Calculation (Remuneration)
- Period for Storing Other Supporting Documents
Conversion of Paper-Form Accounting Documents into Electronic Form for Electronic Storage