The balance sheet and the income statement

Updated on 22 August 2026. We reviewed the minimum structure of the balance sheet under Art. 959a OR, the minimum structure of the income statement under Art. 959b OR, the components of the annual financial statements under Art. 958 OR and the retention period under Art. 958f OR. Since first publication, the terminology in the article has changed: assets and liabilities are now named as in the Swiss Code of Obligations (Aktiven and Passiven), the profit and loss account is now called the income statement (Erfolgsrechnung), and receipts and expenditures have become revenue and expenses. Newly added are the notes as the third component of the annual financial statements, the six-month deadline for the annual report and the ten-year retention period. Still valid without change: the balance sheet as a snapshot on the balance sheet date, the income statement as a presentation of earnings and the interplay between the two documents.

Balance sheet and income statement

The balance sheet and the income statement are two of the three components of the annual financial statements; the third is the notes (Art. 958 OR). They provide a detailed overview of a company’s financial situation and are therefore of key importance for stakeholders, investors and management.

As fiduciaries, our task is to ensure that these documents are prepared correctly, transparently and in accordance with the applicable accounting regulations.

The balance sheet

The balance sheet is a snapshot of a company’s financial position at a specific point in time. It is divided into assets and liabilities. Assets are the company’s property; liabilities comprise borrowed capital and equity.

Assets: The assets side lists items such as cash, receivables, inventories and other assets. These are divided into current assets (available or realizable in the short term) and fixed assets (long-term investments).

Liabilities: The liabilities side shows borrowed capital and equity. Liabilities can be short-term (e.g. trade payables) or long-term (e.g. loans). Equity represents the value that belongs to the owners of the company.

The income statement

The income statement presents the company’s earnings during the financial year. It can be prepared as a production income statement or as a sales income statement, and it compares revenue and expenses.

Revenue: This includes net proceeds from sales of goods and services as well as financial income.

Expenses: This includes cost of materials, personnel expenses, other operating expenses, depreciation and value adjustments, and financial expenses.

The balance of revenue and expenses is the company’s profit or loss.

Notes, deadlines and retention

The notes are the third component of the annual financial statements. The annual report must be prepared within six months after the end of the financial year (Art. 958 para. 3 OR). Accounting records, accounting vouchers, the annual report and the audit report must be kept for ten years; the period begins at the end of the financial year (Art. 958f OR).