Notes to financial statements in Switzerland: requirements and template

A balance sheet and income statement do not tell the whole story. How were certain amounts valued? Has the business guaranteed someone else’s debt? Did something significant happen after year end? The notes provide these explanations and the additional disclosures required by law.

Who must prepare notes?

The annual financial statements of a Swiss limited company or LLC generally comprise the balance sheet, income statement and notes. Opting out of a limited audit does not remove the notes requirement. This distinction follows from Articles 958 and 959c of the Code of Obligations.

Sole proprietorships and partnerships may dispense with notes if they are not subject to the provisions for larger undertakings. Any additional information required must then appear directly in the balance sheet or income statement.

Check your legal structure and applicable accounting requirements. Copying the notes of a large association or listed group does not guarantee a document suited to your small business.

What the notes tell someone reading your accounts

The balance sheet can show a liability or an asset value without explaining all the relevant conditions. The notes add the information needed to understand the accounts and commitments. They help prevent readers from drawing conclusions from incomplete figures.

Consider a lease whose commitments must be disclosed in the notes. Someone reading only the balance sheet might not appreciate the future payments already committed. The additional information helps them assess the business’s financial flexibility over the coming years.

The aim is not to fill pages with legal wording. A useful disclosure is specific: it explains the relevant fact, the amount where required and enough context to understand it. Copying last year’s notes without reviewing contracts and recent events can leave outdated information in the accounts.

Accounting policies and explanations to include

The notes describe accounting policies applied where these are not already prescribed by law. For example, they may explain the method used to determine the cost of inventory or work in progress where this helps readers understand the accounts. They also provide necessary detail and commentary on particular balance sheet and income statement items.

A hidden reserve is a difference between a book value and its economically justified value. Article 959c(1)(3) requires disclosure of the net amount released from replacement reserves and additional hidden reserves, after deducting similar reserves created, if this substantially improves the presentation of the economic result. It does not impose a general requirement to disclose every hidden reserve each year.

Illustrative example: CHF 30,000 of the reserves concerned are released and CHF 10,000 of similar reserves are created during the year. The net release is CHF 20,000 (30,000 − 10,000). Its significance for the reported result must then be assessed: the law does not set an automatic percentage for every business.

Add other disclosures required by law. The content therefore depends on actual transactions and commitments, not just a prefilled list. For example, financial statements presented in a foreign currency require disclosure of the exchange rates used (Article 958d(3)). An income statement presented by function requires separate disclosure of personnel costs, depreciation and valuation adjustments on fixed assets (Article 959b(4)). If assets are valued at observable prices in an active market, also check the disclosures required for that choice and any fluctuation reserves (Article 960b).

The Article 959c disclosure checklist

How to use it: mark each item “applicable”, “not applicable” or “to check”. You can omit a non-applicable item from the notes; there is no need to publish “none”. Keep evidence of the check in the year-end file. The examples below help you prepare the notes; they are not additional legal obligations.

Article 959c(2) lists disclosures to consider where they are not already apparent from the balance sheet or income statement. For each item, ask whether it applies, what amount must be disclosed and which document supports it:

• Business name or name, legal form and registered office.
• A statement about annual average full-time employment: as applicable, not more than 10, 50 or 250 full-time equivalents (FTEs). This concerns full-time equivalent jobs, not simply headcount.
• Direct shareholdings and substantial indirect shareholdings: business name, legal form, registered office, share of capital and voting rights. Do not apply a materiality threshold indiscriminately to all direct shareholdings.
• Own equity interests held by the business or entities it controls, together with acquisitions and disposals and their terms.
• Remaining liabilities under lease transactions analogous to sales contracts and other leases covered by the law which do not expire and cannot be terminated within twelve months.
• Liabilities to pension institutions.
• Total security provided for third-party liabilities, assets pledged to secure the business’s own liabilities and assets subject to retention of title.
• Contingent liabilities where an outflow of resources is unlikely or cannot be estimated reliably.
• Number and value of equity interests or options granted to members of management or governing bodies and employees.
• Explanations of extraordinary, non-recurring or prior-period income and expenses.
• Significant events after the balance sheet date.
• Reasons for an auditor’s resignation before the end of its term or removal from office.
• Required information on capital increases and reductions within a capital band.

This presentation groups some statutory items to make them easier to read. Bond issuers must also provide the required information for each issue: amount, interest rate, maturity and other terms.

Liabilities to pension institutions do not mean all social insurance liabilities indiscriminately. The item includes, in particular, occupational pension liabilities. A general reference to old-age and survivors’ insurance (AHV/AVS) does not replace it.

Three points that are easy to overlook

Shareholder and member accounts and loans. Receivables from and liabilities to direct and indirect participants, management bodies and undertakings in which the business has a direct or indirect participation must be shown separately in the balance sheet or notes (Article 959a(4)). Burying the amount in “other liabilities” is insufficient. Distinguish the relevant categories and explain important terms, including any subordination.

Long-term leases and rental agreements. Do not check only contracts labelled “leasing”. Identify comparable rental commitments, including fixed commercial leases that cannot be terminated within twelve months after the balance sheet date. Review the remaining amount to disclose, actual termination options and liabilities already recognised.

The maximum amount guaranteed. An LLC guarantees a sister company’s bank facility up to CHF 100,000, of which CHF 40,000 is drawn at 31 December. The commitment to disclose is the maximum guarantee of CHF 100,000; the CHF 40,000 drawn can be given as additional information.

Worked example: an extract from the notes

Illustrative notes at 31 December 2026

This extract illustrates a few disclosures for a small Swiss LLC. It does not replace complete notes tailored to the actual facts. All amounts are fictional; prior-year figures are presented alongside current-year figures (Article 958d(2)).

For this illustrative lease, monthly payments are CHF 500. There are 24 payments remaining at the end of 2026, compared with 36 at the end of 2025. This gives 500 × 24 = CHF 12,000 for 2026 and 500 × 36 = CHF 18,000 for 2025. The contract neither expires nor can be terminated within twelve months after either reporting date. Check the statutory scope and balance sheet treatment contract by contract. Omit irrelevant disclosures from the notes after checking them, and retain evidence of the check in the year-end file.

In this example, lease commitments are disclosed in the notes because the information is not already apparent from the balance sheet or income statement. Check which commitments are included and whether they have been recognised in the accounts to avoid omissions or double counting.

The statutory employment disclosure concerns the applicable category. The figures of 4.8 and 4.2 FTEs support that category here. For example, four people working full time and one working at 80% throughout 2026 give 4 + 0.8 = 4.8 FTEs, despite a headcount of five. If working percentages or periods of employment change, calculate an annual average. The company must still document its accounting policies and review every other relevant disclosure, including subsequent events.

How do you turn the figures into wording for the notes?

The following three statements apply only to the assumptions in the example above:

Ask management to confirm subsequent events and contingent liabilities even where no amount appears in the ledger. If there is nothing to report, keep that confirmation in the working file; you do not need to add a negative statement to the published notes.

Additional requirements for larger undertakings

Businesses that are legally subject to an ordinary audit must, in particular, provide additional notes, a cash flow statement and a management report, subject to statutory exemptions.

The additional notes split long-term interest-bearing liabilities between amounts due in one to five years and after more than five years. They also show audit fees separately from fees for other services provided by the auditor.

These duties follow from Articles 961 and 961a. Size-based ordinary audit requirements include companies exceeding two of three thresholds for two consecutive financial years: CHF 20 million in total assets, CHF 40 million in revenue and 250 annual average FTEs. Other circumstances can also make an ordinary audit compulsory (Article 727).

The exemption in Article 961d concerns these additional disclosures, the cash flow statement and management report. It may apply where the business prepares financial statements or consolidated accounts under a recognised standard, or where the legal entity controlling it prepares such consolidated accounts. It does not remove the basic notes requirement; the statutory rights of shareholders or members to request reporting under this chapter remain reserved.

A detailed movement schedule for tangible and intangible fixed assets can be useful, but it should not be presented as a universal notes requirement for every small Swiss LLC.

After year end: adjust the accounts or disclose an event?

Between 31 December and preparation of the accounts, new information may change how the financial year is understood. The key question is whether it provides evidence of a condition that already existed at the balance sheet date or concerns a genuinely later event.

First case: a customer goes bankrupt in February. If its finances were already severely impaired on 31 December, the new information may confirm the need for a valuation adjustment to the receivable in the year-end accounts. A sentence in the notes does not replace a review of that receivable’s value.

Second case: a fire destroys a workshop in January. If the fire occurred after year end and does not reveal a condition already present on 31 December, it is not recorded as a loss in the previous financial year. Its significance may nevertheless require disclosure of its nature and financial effects in the notes. Effects on the business’s ability to continue operating also need a separate assessment: if continuation is no longer possible, merely mentioning the fire is insufficient (Article 958a).

In both cases, collect dates, documents and an estimate of the consequences. The date on which you discover the information does not, on its own, determine the accounting treatment; identify the condition to which it relates.

Explain going-concern uncertainty when it is significant. A material uncertainty about continued operations should be explained together with the measures envisaged and their basis. If the accounts depart from the going-concern assumption, the notes must explain that departure and its effect (Article 958a(3)).

Significant subsequent events can be positive or negative. State their nature and financial effects; if those effects cannot be estimated, say so. Giving the date on which the managing directors or board approved the accounts also helps readers place the information in time.

Prepare the notes with the people who hold the information

Ask the right people for the right documents

The ledger does not always contain everything you need to know. A director may have signed a guarantee, HR knows about changes in staffing and the purchasing team holds new lease contracts. Organise this collection before finalising the accounts.

A simple method is to list the required disclosures and record the supporting document and person confirming each item. Even when an item does not apply, retaining that conclusion in the year-end file avoids repeating all the research next year.

For events after the balance sheet date, record the date, nature and significance, then establish the appropriate treatment. Keep correspondence with customers in difficulty, insurance claims and significant new contracts. These documents help distinguish the two situations described above.

Finally, read the notes alongside the balance sheet and income statement. Amounts, names, periods and explanations must agree. Text that is accurate in isolation can become misleading if it describes a different situation from the accounts to which it is attached.

Our year-end checklist and balance sheet guide can help. Consistent notes explain the accounts; they should not become a standard document detached from the business.

Give the figures the explanations they need

The notes are easier to prepare when important commitments and events are documented throughout the year. They become a reliable explanation of the accounts instead of a document reconstructed in a rush.

Our accounting service can help you gather the necessary information and prepare consistent annual financial statements, with notes tailored to your company’s circumstances.

Sources and references

• Code of Obligations, Article 959c: notes and exemption for sole proprietorships and partnerships
• Code of Obligations: additional requirements for larger undertakings
• Code of Obligations: additional notes disclosures
• Code of Obligations, Article 961d: exemptions from additional reporting for larger undertakings
• Code of Obligations, Article 958a: going concern
• Code of Obligations, Article 959a(4): separate presentation of specified receivables and liabilities

Legal references checked against the current Code of Obligations on 6 November 2026. Examples are illustrative.