Certain accounting rules apply to every company in Lithuania. Each entity needs to know how to prepare financial statements and how to submit them to various institutions. The companies need to be able to distribute profit and pay dividends, and they must have a person/company responsible for such tasks. This quick guide provides general information about accounting in compliance with the legal acts of Lithuania.
Accounting in Lithuania is described and regulated by the following legal acts:
It defines the organisation of accounting in Lithuania, namely, the rules of drafting documents and registers, their storage, and correction of mistakes.
Both Business Accounting Standards and International Accounting Standards are acceptable for financial reporting in Lithuania. Yet some companies (e.g. insurance companies) must handle accounting under the International Accounting Standards while others (e.g. credit unions) have to do it in accordance with the Business Accounting Standards. Companies that do not have strong obligations can choose which standards to apply.
The document defines the rules of consolidated financial reporting (carrying out an audit, publishing a consolidated annual report as well as a report on payments to governments, etc).
Accounting of the company is performed by:
In most cases, accounting cannot be handled by the head of the company. However, the head approves an accounting policy taking into consideration specific business conditions, type of business, and invoking the Accounting Standards.
Employed accountant, a company, or a person providing accounting services is responsible for the accuracy of accounting entries. This is ensured by accounting documents such as invoices, cheques, accounting statements, expense reports, etc. The documents are archived for 10 years and some payroll documentation must be archived for 50 years.
To prepare accurate financial statements, both assets and liabilities should be inventoried at least once a year. The accountant must avoid doing it at the end of the fiscal year.
While a great number of companies choose to start their fiscal year on the 1 st of January, it is important to know that it can start on any month of a calendar year. Although the period can be changed once per five years. In any case, a fiscal year must have twelve consecutive months. At the end of it, financial statements are prepared and accounting books are closed.
The set of annual financial statement depends on the companys size.
The company is considered to be a very small enterprise if at least two of the following statements apply on the last day of the fiscal year:
They should prepare:
The company is considered to be a small enterprise if at least two of the following statements apply on the last day of the fiscal year:
They should prepare:
The company is considered to be a medium-sized enterprise if at least two of the following statements apply on the last day of the fiscal year:
The company is considered to be a large-sized enterprise if at least two indicators exceed a medium-sized enterprises indicators on the last day of the fiscal year.
Medium and large-sized companies shall prepare:
The package of financial statements needs to be signed by the manager and accountant as well as approved by shareholders within four months after the end of the financial year. The package shall be submitted to the Register of Legal Entities within 30 days after the approval.
Annual financial reports must be audited if at least two of the following indicators are exceeded on the last day of the fiscal year:
Profit distribution can be performed within four months after the end of a financial year.
Dividends can be paid for a shorter period than a fiscal year. In this case, an interim financial statement has to be prepared, approved by the General Meeting of Shareholders and submitted to the Register of Legal Entities.
The General Meeting of Shareholders can refuse to adopt a decision to allocate and pay dividends if at least one of the following conditions is met:
Terms of paying dividends:
The companies are obliged to submit SAF-T upon the request of the State Tax Inspectorate. SAF-T contains the entitys accounting data of the respective period. It signifies that accounting systems used by the companies have the possibility of exporting data from the current companys chart of accounts to the standard chart of accounts approved by the Inspectorate.