The Accounting Law is the main regulatory enactment in Latvia governing the accounting procedures and stating the basic principles to be followed by the companies of our country and accountants thereof. Over time, the law changes according to the market situation.
What does the Accounting Law apply to?
According to the current revision of the law, it applies to merchants, cooperative societies, foreign merchant branches and foreign merchant permanent representations, associations and foundations, political organisations and their alliances, religious organisations, trade unions, institutions funded by state or local governments, state or municipal agencies, other legal entities and natural persons involved in economic activity;
Duty
Thus, every enterprise or organisation is obliged to conduct accounting. Accounting records must reflect all the economic transactions causing changes in the condition of property. Accounting shall be conducted so that a third person, qualified in the area of accounting, may obtain a true and clear representation of the financial position of the undertaking at the date of the balance sheet, the results of the activities thereof, cash flow for a specific time period, as well as be able to determine the beginning of each economic transaction and trace its course.
Liability
The law also states that the accounting information must be truthful, comparable, comprehensible, and complete, and it must ensure division of revenue and expenses in each reporting period. The main liability for the aforementioned lies with the head of the enterprise.
Changes under the development
Back in the end of 2019, work on amendments to the Accounting Law was commenced, however, the discussions have been protracted, and now it seems that the new changes could enter into effect, possibly, on 1 July rather than on 1 January 2021. The amendments both clarify basic definitions and introduce changes in punishing measures for accounting mistakes. Significant changes to the law were necessary in relation to the increase in proportion of electronic documents.
Electronic accounting documents
These days, nearly every accountant uses electronic documents in their daily work and perform their duties by using appropriate software, therefore, these matters were to be mandatorily covered by the law. For example, the draft law provides for introduction of a new term – electronic certification or authorisation, which will include various control provisions necessary for appropriate processing and storage of accounting data. Furthermore, it is planned to replace the requirement concerning storage of documents in printed format by an option to store documents electronically.
Corsax.lv specialists have a good command of all the nuances of the Accounting Law and follow them all in their working process, thus, head of an enterprise may feel safe that accounting will be taken good care of.
