Latvia
| Extent of IFRS application | Status | Additional Information |
|---|---|---|
| IFRS Standards are required for domestic public companies |
|
All domestic companies whose securities trade in a regulated market are required to use IFRS Standards as adopted by the EU in their consolidated financial statements. |
| IFRS Standards are permitted but not required for domestic public companies | ||
| IFRS Standards are required or permitted for listings by foreign companies |
|
IFRS Standards as adopted by the EU are required in their consolidated financial statements except that a foreign company whose home jurisdiction’s standards are deemed by the EU to be equivalent to IFRS Standards may use its home standards. |
| The IFRS for SMEs Standard is required or permitted | No. | |
| The IFRS for SMEs Standard is under consideration | No. |
Organisation
Ministry of Finance of the Republic of Latvia.
Latvijas Zvērinātu revidentu asociācija (LZRA) [Latvian Association of Certified Auditors].
Role of the organisation
The Ministry of Finance of the Republic of Latvia is the managing state administrative institution that Is directly responsible for setting accounting policy in Latvia, including drafting legislation related to accounting and preparation of the financial statements both for private and public entities. As a result, the application of IFRS Standards for companies outside the scope of the EU IAS regulation is the direct responsibility of the Ministry.
LZRA is the national professional organisation of Certified Auditors in Latvia. It does not have responsibility for establishing accounting standards. LZRA normally provides comments on accounting legislation and regulations to the Ministry of Finance.
Website
Ministry of Finance: www.fm.gov.lv/en/
LZRA: www.lzra.lv/
Email contact
Ministry of Finance: pasts@fm.gov.lv
LZRA: lzra@lzra.lv
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
Yes.
Refer to the IAS Regulation adopted by the European Union in 2002.
What is the jurisdiction's status of adoption?
Additional comments provided on the adoption status?
As a member state of the European Union, Latvia is subject to the IAS Regulation adopted by the European Union in 2002.
The EU IAS Regulation requires application of IFRS Standards as adopted by the EU for the consolidated financial statements of European companies whose securities trade in a regulated securities market starting in 2005. The EU IAS Regulation gives member states the option to require or permit IFRS Standards as adopted by the EU in separate company financial statements (statutory accounts) and/or in the financial statements of companies whose securities do not trade on a regulated securities market. See the Profile for the European Union for more detailed information about the EU IAS Regulation.
There is one regulated market in Latvia – the NASDAQ Riga Stock Exchange.
Latvia used the option under the IAS Regulation as follows:
Companies whose securities trade in a regulated market
- Require IFRS Standards as adopted by the EU in the consolidated financial statements of companies whose securities trade on a regulated market.
- Require IFRS Standards as adopted by the EU in the separate company financial statements of companies whose securities trade on a regulated market on the official list.
- Permit IFRS Standards as adopted by the EU in the separate company financial statements of companies whose securities trade on a regulated market on the secondary and free lists.
Companies whose securities do not trade in a regulated market
- Require IFRS Standards as adopted by the EU in both the consolidated and separate company financial statements of all banks, insurance commercial companies, and other supervised financial institutions including those whose securities do not trade in a regulated market.
- Permit IFRS Standards as adopted by the EU in the consolidated financial statements of all other companies whose securities do not trade in a regulated market.
If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Standards in the jurisdiction.
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED?
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
Are IFRS Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
- IFRS Standards as adopted by the EU are required in the separate company financial statements of companies whose securities trade on a regulated market on the official list.
- IFRS Standards as adopted by the EU are permitted in the separate company financial statements of companies whose securities trade on a regulated market on the second and free lists.
For instance, are IFRS Standards required or permitted for companies whose securities do not trade in a public market?
Required for some and permitted for others. Specifically:
- IFRS Standards as adopted by the EU are required in both the consolidated and separate company financial statements of all banks, insurance commercial companies, and other supervised financial institutions whose securities do not trade in a regulated market.
- IFRS Standards as adopted by the EU are permitted in the consolidated financial statements of all other companies whose securities do not trade in a regulated market. However, these companies are not permitted to use IFRS as adopted by the EU in their separate company financial statements.
If the jurisdiction currently does NOT require or permit the use of IFRS Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Standards for such companies in the future?
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED in such cases?
Required for some and permitted for others. Foreign companies whose securities trade in a regulated market in Latvia (and generally in the EU) are required to report under IFRS Standards as adopted by the EU for their consolidated financial statements unless the European Commission has deemed their local accounting standards to be equivalent to IFRS Standards, in which case they may use their local standards. Further details may be found on the 'Financial Reporting' page of the European Commission's website.
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
Which IFRS Standards are required or permitted for domestic companies?
The auditor's report and/or the basis of presentation footnotes states that financial statements have been prepared in conformity with:
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Standards and the jurisdiction’s GAAP)?
Are IFRS Standards incorporated into law or regulations?
If yes, how does that process work?
If no, how do IFRS Standards become a requirement in the jurisdiction?
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Standards (including Interpretations) in place?
If yes, what is the process?
If no, how do new or amended IFRS Standards become a requirement in the jurisdiction?
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Standards and/or made any modifications to any IFRS Standards?
If yes, what are the changes?
Other comments regarding the use of IFRS Standards in the jurisdiction?
Are IFRS Standards translated into the local language?
Yes.
The European Union has 24 official and working languages. They are: Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish and Swedish. Before they are published in the Official Journal of the European Union, and therefore become binding under EU law, individual IFRS Standards must be translated into all of those languages (other than English and Irish).
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Standards?
Pursuant to a copyright waiver agreement with the Directorate-General for Translation of the European Commission, the Commission takes care of the translation into the official languages according to their own translation process. The translation only covers the standards and mandatory guidance, which is what is then published in the Official Journal of the European Union.
In addition, some countries (usually the standard setter or institute) have a translation contract with the IFRS Foundation to produce an ‘official translation’ for publication of a bound volume of IFRS (usually the ‘Red Book’) and publication, in some cases, of individual standards and exposure drafts.
Has the jurisdiction adopted the IFRS for SMEs Standard for at least some SMEs?
If no, is the adoption of the IFRS for SMEs Standard under consideration?
Did the jurisdiction make any modifications to the IFRS for SMEs Standard?
If the jurisdiction has made any modifications, what are those modifications?
Which SMEs use the IFRS for SMEs Standard in the jurisdiction, and are they required or permitted to do so?
For those SMEs that are not required to use the IFRS for SMEs Standard, what other accounting framework do they use?
Other comments regarding use of the IFRS for SMEs Standard?
General requirements for companies for-profit entities
The following companies are required to file financial statements with the FCMC:
Investment funds
The annual accounts and opinion of a sworn auditor shall be submitted not later than four months after the end of the reporting year and the semi-annually reports within 30 days after the end of the relevant reporting period. They shall be made publicly available on the website not later than two months after the end of the relevant reporting period.
State-funded pension scheme investment plans
The annual accounts and opinion of a sworn auditor shall be submitted not later than three months after the end of the reporting year and made publicly available on the website not later than 1 May.
Alternative investment funds
The annual accounts and the consolidated annual accounts and opinion of a sworn auditor of the fund managed by an external manager shall be submitted not later than six months after the end of the reporting year and made publicly available on the website of the manager at the same time.
The following companies are required to file financial statements with the State Revenue Service (SRS)1:
Credit institutions
The annual accounts and the consolidated annual accounts and opinion of a sworn auditor shall be submitted not later than three months after the end of the reporting year and published on the bank’s website not later than 1 April. The public quarterly reports shall be published on the bank’s website not later than two months after the end of the relevant reporting period.
Insurance companies
The annual accounts and opinion of a sworn auditor shall be submitted not later than 15 May and simultaneously published on the insurer’s website. The consolidated annual accounts and opinion of a sworn auditor shall be submitted no later than seven months after the end of the reporting year and simultaneously published on the insurer’s website. The public quarterly reports shall be submitted on the insurer’s website no later than two months after the end of the relevant reporting period.
Investment brokerage firms, investment management companies
The annual accounts and opinion of a sworn auditor shall be submitted no later than three months after the end of the reporting year. The consolidated annual accounts and opinion of a sworn auditor shall be submitted no later than seven months after the end of reporting year. Investment brokerage firms to which the requirements for capital adequacy are applied shall publish on the website annual accounts no later than 1 April, and consolidated annual accounts no later than within seven months after the end of the reporting year.
Private pension funds, pension plans
The annual accounts and opinion of a sworn auditor shall be submitted no later than four months after the end of the accounting year and made publicly available on the website not later than four months after the end of the accounting year.
Alternative investment funds
The annual accounts and the consolidated annual accounts and opinion of a sworn auditor of the fund established as a company shall be submitted no later than six months after the end of the reporting year and made publicly available on the website at the same time.
1 The SRS forwards financial reports that it receives electronically to the Enterprise Register where information is made available upon request.
Listed companies
SRS*:
A company shall submit the annual account and the sworn auditors’ report not later than four months (seven months if certain criteria are met) after the end of the accounting year.
FCMC and NASDAQ OMX RIGA (Stock Exchange):
- Annual accounts and consolidated annual accounts and opinion of sworn auditor within four months after the end of the reporting year, but not later than on the next business day after the day when the sworn auditor submits the opinion about the accounts. Reports are publicly available in the Central Storage of Regulated Information system and on the stock exchange’s website
- Interim reports for a period of three, six, nine and twelve months are publicly available in the Central Storage of Regulated Information system and on the stock exchange’s website not later than within two months after the end of relevant reporting period.
* SRS forwards financial reports received electronically to the Enterprise Register, which information is made available upon request.
General requirement for companies
Listed companies
Filings to the SRS can be in paper format, XML files or web-based forms (via the Electronic Declaration System, EDS).
Filing to the FCMC and NASDAQ OMX RIGA are in electronic (PDF) format.
What type or format of structured electronic filing is required or permitted?
What is the purpose of the electronic filing?
What documents are required to be filed to the electronic filing system?
Is the financial data provided in XBRL format publicly available?
Is the XBRL reporting system based on the IFRS Taxonomy issued by the IASB?
If no, what are the reasons for not using the IFRS Taxonomy?
Is the IFRS for SMEs filing adopted in the XBRL reporting system?
If no, are there any plans to implement the IFRS for SMEs filing in the future?
How is the XBRL financial statement reporting system set up?
What is (are) the intended purpose(s) of the local base taxonomy?
Which IFRS Taxonomy files are used?
Which part(s) of the IFRS (local) Taxonomy do filer's submissions import/refer to?
Are filers permitted to replace or override any aspects or specified features of the IFRS (local) Taxonomy?
If yes, which aspects and how does this work?
What is the scope or coverage of XBRL filing/tagging?
Are there any plans to extend the coverage of the XBRL filing/tagging in the future?
Which version of the IFRS Taxonomy is being used
If the taxonomy is to be updated to the 2014/2015 version, which of the following module(s) is (are) to be used?
