A few days ago, Luxembourg's Council of Government approved a draft of the Grand-Ducal Regulation (GDR) that would determine the content of the new Luxembourg Standard Chart of Accounts (PCN). This draft GDR has yet to be commented on by regulatory bodies, and thus is not yet final. It will only come into force when published on Mémorial A of Legilux.

This modernised PCN, which comes almost 10 years after its predecessor, aims to better meet the needs of companies preparing accounts ("preparers") and to allow public administrations ("users") to use the form more efficiently. Put another way, it will oblige preparers to provide better and more relevant financial information, with which users can more easily create reliable statistics and calculate direct or indirect tax. Ultimately, this will reduce the volume of forms, inquiries, and redundant requests for information from users.

What's new?

In the GDR, particular attention has been given to technology and process automation; indeed, compliance with it depends largely on these aspects. To these ends, the GDR introduces a flexible and automated mapping system for generating balance sheets (B/S) and profit-and-loss accounts (P/L). The new system is flexible in that the management body of a preparer, should it be unsatisfied with the mapping for true-and-fair-view reasons, can manually update how the mapping is done.

This mapping system should not only improve the tracking of accounting data for users, but also simplify the administrative process for preparers. Ultimately, then, applying the new GDR should bring no extra work for either party.

Furthermore, in the new PCN, some accounts have been deleted, added, or moved in order to meet the specific needs of preparers and users, as well as to comply with the Accounting Law and GDR both dated 18 December 2015.

The process for filing accounts on the RCSL website will not change.

Timeline to deployment

PCN 2020 will be applicable to the annual accounts of financial years beginning on or after 1 January 2020, to be filed with the Register of Commerce and Companies (RCS) in 2021.

Migration to PCN 2020 will happen in four phases:

  • 28 June 2018: the PCN 2020 Form was published on the eCDF website, specifically new content together with the first validation rules and basic documentation.
  • 1 March 2019: an outline of the mapping tables between PCN 2020 and the B/S and P/L 2020 will be published on the eCDF website.
  • 1 August 2019: the new table-mapping feature will be activated, enabling the deployment of automated B/S and P/L generation.
  • 4 January 2021: PCN 2020, together with the automatic generation of the B/S and P/L and the corresponding mapping tables will be fully deployed.

More updates to come!

The PCN 2020 rollout is already in motion. As developments happen we will blog about them here—in the meantime, check out the draft GDR and a comparative table between PCN 2009 and PCN 2020 published by the Commission des Normes Comptables (CNC) on their website.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.