Accounting and Auditing
International Accounting Standards
The implementation of International Accounting Standards has been obligatory for all legal entities-for banks, as of January 1, 2003, and for other companies, as of January 1, 2004.
Annual Financial Statements
Annual financial statements should comprise the following documents:
- Balance sheet,
- Income statement,
- Cash flow statement,
- A report on the changes in equity,
- Notes to the financial statements.
For small-sized companies, only the balance sheet and the income statement are obligatory.
Submission of Financial Statements
Only Annual Financial Statements must be prepared (as at December 31) and submitted to the National Bank of Serbia (NBS) - the Solvency Center.
Legal entities must submit their financial statements as follows:
- Annual Financial Statements by February 28;
- Consolidated Financial Statements by March 31;
- Audited Financial Statements together with the auditor's opinion by June 30.
Additionally, all companies requiring audit (see below) are requested to publish their financial statements together with the auditor's opinion on their web site or make public available, at least 7 months after the Balance Sheet due date. However, there are two exceptions relating to the preparation of Annual Financial Statements on December 31:
- Foreign company subsidiaries, for which the financial year differs from the calendar year (such companies may prepare and submit their Financial Statements at the parent company's financial year end with the obligatory approval from the Ministry of Finance);
- Entities undergoing a change of status (e.g. merger, liquidation, or bankruptcy);
Such entities are required to prepare their financial statements at the date on which this procedure is completed.
Audit Requirements
The Annual Financial Statements audit for large and medium-sized companies is obligatory. A rotation of medium-sized company auditors is compulsory every 5 years, while the rotation of large company auditors is required every 3 years.
Chart of Accounts and Accountants
Records must be kept in accordance with the prescribed Chart of Accounts.
The Ministry of Finance has prescribed the New Chart of Accounts and released it in May 2004. This new Chart of Accounts has been applied to opening balances and transactions as of January 1, 2004.
For tasks, such as keeping the book of accounts, or preparing and presenting Financial Statements, all legal entities are requested to engage professional staff holding certification.
The new Chart of Accounts has been designed to provide classifying, recording, measuring, and presenting transactions and balances in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) requirements.
The Provisional Regulations of the Rules on the Chart of Accounts prescribe ways of transferring balances from old to new accounts, as well as ways of making reclassifications and accounting adjustments where necessary.
The new Chart of Accounts also prescribes the accounting treatment of certain balance sheet items in opening IFRS balance sheets subject to the reconciliation of equity as at January 1, 2004 and the reconciliation of the relating profit and loss.
Company Size
Classification criteria:
1. Medium - sized companies:
a. Average number of employees: 50-250;
b. Annual total income: €2,500,000-10,000,000 in RSD equivalent;
c. Average property value: €1,000,000-5,000,000 in RSD equivalent.
2. Small-sized companies - if the value of at least two of the above criteria is lower than that mentioned.
3. Big-sized companies - if the value of at least two of the above criteria is higher than that mentioned.
Requirements for Preserving Records
The requirements applicable are as follows:
- Salary records containing important employee information - permanently;
- Financial statements - 50 years;
- The general ledger - 10 years;
- Supporting documentation - 5 years.
Financial institutions are obliged to keep data on payment clearance for 5 years.
