REPUBLIC OF LITHUANIA
LAW
ON FINANCIAL ACCOUNTING
6 November 2001 No IX-574
(As last amended on 1 May 2022 – No XIV-680)
Vilnius
CHAPTER I
GENERAL PROVISIONS
Article 1. Purpose and scope of the Law
1. The purpose of this Law shall be to regulate the organisation of financial accounting and account keeping with a view to ensuring the suitability of financial accounting information for preparing statements and making economic decisions by entities or users of the information.
2. This Law shall establish the requirements for recording and supporting economic transactions, as well as the organisation of financial accounting and account keeping.
3. This Law shall apply to the following entities:
4) funds of funds or financial instruments specified in the Law of the Republic of Lithuania on Investments where the fund of funds (hereinafter: ‘FOF’) is not established;
7) residents who pursue economic activities, including self-employment, (hereinafter: ‘economic activities’);
4. The organisation of the financial accounting and account keeping of the Bank of Lithuania shall be regulated by this Law, unless other laws of the Republic of Lithuania regulating the activities of the Bank of Lithuania provide otherwise.
5. The provisions of this Law have been harmonised with the legal acts of the European Union listed in the Annex to this Law.
Article 2. Definitions
1. ‘General ledger’ means a consolidated financial accounting register which contains data from other financial accounting registers and the calculated balances of the general ledger accounts at the beginning and end of the reporting period, as well as the amounts of balance increase and decrease during the reporting period.
2. ‘General ledger account’ (hereinafter: ‘account’) means an item of the classification of information about economic transactions, which is used to accumulate and group, in financial reporting registers, information to determine entity’s assets, equity capital or net assets, financing amounts, liabilities, income and costs with the level of detail chosen by the entity or established by the legal acts regulating the requirements for financial accounting.
3. ‘General ledger chart of accounts’ (hereinafter: ‘chart of accounts’) means a list of accounts used by an entity.
4. ‘Double entry’ means an entry in the financial accounting register where the value of the same economic transaction is entered in one account/accounts and an equivalent opposite amount is entered in another account/other accounts.
5. ‘Financial accounting’ (hereinafter: ‘accounting’) means a system of supporting, assessing and recording economic transactions designed to obtain financial information necessary for preparing of a set of financial statements (hereinafter: ‘financial statements’), tax returns and other statements containing financial information (hereinafter collectively: ‘statements’) and/or for making economic decisions by users of the information.
6. ‘Financial accounting document’ (hereinafter: ‘accounting document’) means textual information, irrespective of the manner, form or medium of its compilation or presentation, confirming an economic transaction.
7. ‘Financial accounting information system’ (hereinafter: ‘accounting information system’) a performance management information system for keeping accounts and/or preparing statements, excluding spreadsheets contained in computer software packages.
8. ‘Financial accounting register‘ (hereinafter: ‘accounting register’) means a summary of economic transactions, made on the basis of accounting documents, which, irrespective of the manner, form, and medium of its compilation, contains the recorded and/or summarised data relating to economic transactions.
9. ‘Inventory’ means examination of assets and liabilities and comparison of their actual balances with the data in accounting registers.
10. ‘Liability’ means an obligation arising from performed economic operations for which an entity is or will be required to settle in the future by assets or services and the amount of which can be objectively determined.
11. ‘Equity capital’ means a share of the assets of an entity remaining after deducting liabilities from the total assets.
13. ‘Head of an entity’ means either of the following:
5) the general partner of a partnership appointed to perform the duties of the management body referred to in Article 2.82(3) of the Civil Code of the Republic of Lithuania;
14. ‘Simplified financial accounting’ (hereinafter: ‘simplified accounting’) means accounting where a single entry is made.
15. ‘International Financial Reporting Standards’ means International Accounting Standards as defined in Regulation (EC) No 1606/2002.
16. ‘International Public Sector Accounting Standards’ means the principles of recording of economic transactions of public sector entities in accounting and the principles of preparing of financial statements approved by the Public Sector Accounting Standards Board of the International Federation of Accountants.
17. ‘Assets’ means valuables managed and used by and/or at the disposal of an entity and the use of which is expected to bring economic benefits.
18. ‘Economic transaction’ means an activity of an entity or an event dependent on or independent of an entity which changes the amount and/or structure of assets and/or equity capital or net assets, financing amounts, liabilities, income and costs.
19. ‘Management position’ means the position of the members of the management and supervisory bodies of a legal person and the position of employees authorised to issue instructions to subordinate persons and adopt significant decisions relating to the management and activities of the legal person.
20. ‘Performance management information system’ means a set of organisational, technical and software tools intended for process co-ordination, automation and efficiency-building in the activities carried out by an entity, as well as intended for collecting and processing of information related to these processes.
21. ‘Internal control’ means a set of control measures established by an entity, which ensure compliance with at least the following requirements for accounting:
22. Other concepts used in this Law shall be interpreted as they are defined in the Law of the Republic of Lithuania on Financial Reporting by Undertakings, the Law of the Republic of Lithuania on Accountability of Public Sector, the Law of the Republic of Lithuania on the Management, Use and Disposal of State and Municipal Assets, the Law of the Republic of Lithuania on Documents and Archives, the Law of the Republic of Lithuania on Value Added Tax, the Law of the Republic of Lithuania on Corporate Income Tax, the Law of the Republic of Lithuania on Personal Income Tax, the Law of the Republic of Lithuania on Management of State Information Resources, the Law of the Republic of Lithuania on the Accumulation of Pensions, the Law of the Republic of Lithuania on Collective Investment Undertakings, the Law of the Republic of Lithuania on a Farm Holding of a Farmer, and the Law of the Republic of Lithuania on Public Procurement.
Article 3. General requirements for supporting and recording of economic transactions
3. Economic transactions must be recorded on the day they are carried out or immediately whenever possible but not later than before the day of preparing statements. Economic transactions in cash (hereinafter: ‘cash transactions’) must be recorded not later than on the last day of the current month.
4. Accounts shall be kept by making a double entry, except for the cases where the entities referred to in Article 4 of this Law choose simplified accounting.
Article 4. Entities entitled to opt for simplified accounting
The following entities may opt for simplified accounting:
2) legal persons of unlimited civil liability who are not payers of value added tax and have no employees during the reporting and the preceding financial year;
3) non-profit legal persons of limited civil liability who have no employees during the reporting and the preceding financial year and whose income and/or financing amounts received during the preceding financial year and the year before the preceding financial year did not exceed EUR 30,000, with the exception of legal persons attributed to public sector entities, as well as religious communities, associations and centres;
Article 5. Euro foreign exchange rate
1. Entities must choose the date of the euro foreign exchange rate to be used in accounting for the conversion of the amounts of economic transactions, whose execution and existence or the recording of results is related to a foreign currency, and the source where the euro foreign exchange rate is published.
2. Entities may opt for either of the following:
1) the euro foreign exchange reference rate published by the European Central Bank or the euro foreign exchange reference rate published by the Bank of Lithuania where the euro foreign exchange reference rate is not published by the European Central Bank; or
3. Entities which have opted for the source of publication of the euro foreign exchange rate referred to in Article 5(2)(1) may apply either of the following:
1) the euro foreign exchange rate announced on the day of the economic transaction or, where the rate has not been announced on that day, the most recently announced euro foreign exchange rate or
4. Public sector entities shall apply the euro foreign exchange rate specified in Article 5(2)(1) published in the source referred to in Article 5(3)(2).
Article 6. Preparing, providing and accepting of accounting documents
1. Accounting documents shall be prepared in the course of an economic transaction or upon its completion and shall be provided/sent to the recipient immediately and not later than before the 10th day of the following month after the day of the execution or completion of the economic transaction.
2. Parties may agree on the need to prepare accounting documents for the provision of services of a permanent nature to natural persons that do not pursue economic activities.
3. Electronic accounting documents shall be provided by the means chosen by the entity that prepares the electronic accounting document upon a prior consent of the recipient of the accounting document, with the exception of the cases where electronic accounting documents that are provided to the entities referred to in paragraph 4 of this Article comply with the European standard for electronic invoicing or are provided through the E. sąskaita electronic invoicing information system. An electronic accounting document shall be interpreted as an accounting document that is prepared, delivered and received in the electronic format that enables the processing of this document by automatic and electronic means.
4. In the cases specified by the Government of the Republic of Lithuania, public sector entities and other entities that are contracting authorities shall be provided solely with electronic accounting documents and the said entities shall accept and process these documents by means of the E. sąskaita electronic invoicing information system.
Article 7. Requirements for accounting documents
1. An accounting document supporting an economic transaction between two or more entities, as well as between an entity and a natural person who does not pursue economic activities shall include the following mandatory information:
1) the name/first name and surname and/or registration number of the legal person of the entity that has executed the economic transaction;
4) the period or date of the economic transaction where the date of preparing the accounting document is other than the period or date of the economic transaction;
5) the result of the economic transaction in monetary and/or quantitative terms. Where the result of an economic transaction is expressed quantitatively, the units of measurement must be stated;
6) the name of the accounting document, the name/ first name and surname of the recipient of the accounting document, and the registration number of the legal person, except for the cases where such information is not mandatory under tax laws or legal acts adopted on the basis thereof;
2. In cases other than those referred to in paragraph 1 of this Article, an accounting document supporting an economic transaction shall contain information on the period or date, the substance and the amount of the economic transaction. If necessary, the entity must support the calculated amount of the economic transaction.
3. In addition to the information specified in paragraph 1 of this Article, an accounting document supporting a cash transaction must indicate the first name(s) or the first letter(s) of the first name(s), surname(s), and signature(s) of the person(s) authorised to prepare and sign or only sign accounting documents and the first name(s) or the first letter(s) of the first name(s), surname(s), and signature(s) of the person who received the cash. This requirement shall not apply where, under tax laws or legal acts adopted on the basis thereof, the information specified in Article 7(1)(6) is optional and/or cash transactions are executed through a self-service facility of a financial institution.
4. Accounting documents, where they are to be signed, shall be signed in person or in accordance with the procedure laid down in Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC and in accordance with the Law of the Republic of Lithuania on Electronic Identification and Trust Services for Electronic Transactions.
5. Editing of the accounting documents that support cash transactions shall be prohibited. Where an error is made in an accounting document supporting a cash transaction, a new accounting document shall be prepared. The accounting document containing an error shall be deemed void and shall be kept together with other accounting documents of the reporting period.
6. The requirements for the accounting documents used for the calculation of taxes shall be established by the Government or an institution authorised by it.
Article 8. Requirements for accounting registers
1. Entities shall choose the number, compilation method and form of accounting registers. Every entity, with the exception of the entities, specified in Article 4 of this Law, that have opted for simplified accounting, must create the general ledger, irrespective of their choice in compiling accounting registers. Where an entity executes cash transactions, a cash accounting register must be compiled.
2. An entry in the accounting register shall contain the following information:
1) the period or date of the economic transaction and the date of its record in the accounting register;
3. The general ledger and the cash accounting register may be unsigned where at least one of the following requirements is met:
1) an entry in the accounting register is unchanged and identifies the person who has made and/or approved the entry or the person who has made and/or approved the related entry in case of an automatic entry, and the date of the entry.
2) in case of change or deletion of an entry in the accounting register, the person who made and/or approved the change and the date of the change or deletion are indicated and the information, specified in paragraph 2 of this Article, contained before the change or deletion of the entry is retained.
4. In other cases than those specified in paragraph 3 of this Article, the general ledger and the cash accounting register must be signed in accordance with the procedure laid down by the head of the entity.
5. Where information on economic transactions of an entity is accumulated and/or accounting registers are compiled and stored in several performance management information systems and/or in other entities, entries in the accounting registers of the entity may be made and the amounts of economic transactions recorded in other performance management information systems and/or in other entities may be indicated at least quarterly, provided that such amounts can be supported in accordance with the procedure laid down by this Law.
Article 9. Standard file of accounting data
Entities, specified by the Government or an institution authorised by it, which keep accounts in accounting information systems must, in accordance with the procedure laid down by the Government or an institution authorised by it, ensure the possibility of submitting their accounting data to the state information system, namely the smart tax administration information system i.MAS, in a standard file of accounting data. A standard file of accounting data shall be a form for providing information about economic transactions in compliance with the technical specification and technical requirements for the standard file of accounting data, drawn up by the Government or an institution authorised by it.
Article 10. Procedure for storing of accounting documents and accounting registers
1. Accounting documents and accounting registers shall be stored in accordance with the procedure laid down by the head of an entity in accordance with the Law on Documents and Archives.
2. Electronic accounting documents submitted to the E. sąskaita electronic invoicing information system or electronic accounting documents prepared in accordance with the European standard for electronic invoicing and submitted to performance management information systems, the managers of which ensure access to electronic accounting documents for submitting and receiving entities, ensure the storage of accepted electronic accounting documents, in accordance with the Law on Documents and Archives and the Law on Value Added Tax, and the submission thereof to state institutions and other persons, where submission is mandatory, shall be deemed as kept by the entity. In this case, the entity must preserve the list of the electronic accounting documents submitted to the E. sąskaita electronic invoicing information system and to other performance management information systems together with other accounting documents for the reporting period.
Article 11. Requirements for keeping accounts
1. Entities shall keep accounts in such a way as to ensure the preparation of financial statements.
1) In accordance with the International Financial Reporting Standards, this requirement shall apply to the following entities:
e) management companies operating in accordance with the Law on Collective Investment Undertakings, the Law of the Republic of Lithuania on Collective Investment Undertakings for Informed Investors, the Law of the Republic of Lithuania on Managers of Alternative Collective Investment Undertakings and the Law of the Republic of Lithuania on the Supplementary Voluntary Accumulation of Pensions;
g) state-owned entities that are classified as public-interest entities under the Law of the Republic of Lithuania on the Audit of Financial Statements.
2) In accordance with the Lithuanian Financial Reporting Standards or the International Financial Reporting Standards, this requirement shall apply to the following entities:
a) profit-making legal persons of limited civil liability, with the exception of the entities referred to in point 1 of this Article;
c) occupational pension funds operating in accordance with the Law of the Republic of Lithuania on the Accumulation of Occupational Pensions;
d) legal persons of unlimited civil liability where they choose to prepare financial statements at their own discretion or where they are obliged to do so under the Law on Financial Reporting by Undertakings.
3) In accordance with the Lithuania Financial Reporting Standards, this requirement shall apply to the following entities:
a) pension funds operating in accordance with the Law on the Accumulation of Pensions and the Law on the Supplementary Voluntary Accumulation of Pensions;
2. Entities who are required to prepare consolidated financial statements and whose securities are admitted to trading on a regulated market shall keep accounts in such a way as to ensure the preparation of consolidated financial statements in compliance with the International Financial Reporting Standards.
3. The Government or an institution authorised by it shall establish the accounting procedure applicable to the following entities:
4. Religious communities, associations and centres shall keep accounts in accordance with the Lithuanian Financial Reporting Standards or in accordance with the procedure laid down in their canons, statutes or other activity documents to the extent that they do not contradict the provisions of this Law.
Article 12. Methodological guidance for accounting
1. General methodological guidance for accounting shall be provided by the Ministry of Finance of the Republic of Lithuania in accordance with legal acts of the Republic of Lithuania, European Union law and taking into account the International Financial Reporting Standards and International Public Sector Accounting standards.
2. The Lithuanian Financial Reporting Standards and the Public Sector Accounting and Financial Reporting Standards shall be approved by the Minister of Finance of the Republic of Lithuania.
3. The Lithuanian Financial Reporting Standards shall be drawn up in compliance with the European Union law and taking into account the International Financial Reporting Standards.
4. The Public Sector Accounting and Financial Reporting Standards shall be drawn up taking into account the International Public Sector Accounting Standards and other methodologies (guidelines, studies) developed by the Public Sector Accounting Standards Board of the International Federation of Accountants.
5. The Ministry of Finance shall be responsible for the following:
1) drawing up and publishing of methodological recommendations for the Public Sector Accounting and Financial Reporting Standards;
2) drafting, approving, and publishing, in the Register of Legal Acts, of a master chart of accounts mandatory for public sector entities;
6. An institution authorised by the Government shall, upon agreement with the Ministry of Finance, publish and provide consultations on the following matters:
1) methodological recommendations for the Lithuanian Financial Reporting Standards and a sample chart of accounts for legal persons of limited civil liability who prepare financial statements in accordance with the Lithuanian Financial Reporting Standards;
2) recommendations to entities, other than public sector entities, concerning the choice of the person responsible for keeping accounts;
3) recommendations to entities, other than public sector entities, on the organisation of internal control;
4) recommendations to entities providing accounting services on the procedure for organising and monitoring the provision of accounting services;
7. In performing the functions specified in this Article, the Ministry of Finance may set up one or several advisory accounting committees, comprising representatives of state and/or municipal institutions, higher education institutions, professional organisations, or other agencies and organisations. The task(s) of such a committee or committees shall be established by the Minister of Finance.
Article 13. Organising accounting
1. The head of an entity shall organise the accounting of the entity by taking the following actions:
1) select the person responsible for keeping accounts, except for the cases where the laws regulating the activities of the entity assign this right to other governing bodies of the entity;
2) ensure that the person responsible for keeping accounts is provided with correct, accurate and complete information on economic transactions and on the assumptions applicable for the valuation of assets and liabilities in due time;
5) ensure that, in the event of a change in the person responsible for keeping accounts or in the head of the entity, accounting documents, accounting registers and other information necessary for keeping accounts are transferred in due time to another person responsible for keeping accounts or to the head of the entity;
6) ensure the possibility, in accordance with Article 9 of this Law, to submit accounting data to the state information system, namely the smart tax administration information system i.MAS, in a standard file of accounting data.
2. The head of an entity shall ensure that the balance of assets and liabilities accounts is supported by the inventory data in the following frequency:
2) immediately where a decision on liquidation, reorganisation or restructuring of the entity is taken;
Article 14. Keeping accounts
1. The persons responsible for keeping accounts shall keep the accounts of an entity by taking the following action:
1) record economic transactions in compliance with the requirements set forth in this Law and the applicable standards in accordance with the procedure for recording and evaluating economic transactions established by the head of the entity;
2. Persons who have been found guilty of committing a serious or grave crime against property, property rights and property interests, the economy and business practice, the financial system, civil service and public interests may not hold management positions or be participants of a legal person providing accounting services or performing an accounting function or be self-employed providers of accounting services until their conviction has expired or has been expunged.
Article 15. Requirements for organising the accounting and keeping the accounts of public sector entities
1. The procedure for keeping the accounts and organising the financial accounting of the public sector entities that keep their accounts independently shall be laid down by the Government or an institution authorised by it having regard to the requirements set forth in Article 13(1) and Article 14(1) of this Law.
2. When keeping their accounts, public sector entities shall use the following:
1) the performance management information system run by the Ministry of Finance and aimed at optimising the accounting processes of public sector entities taking into account the requirements for accounting and reporting of the public sector in accordance with the procedure laid down by the Minister of Finance, and/or
2) other general public sector performance management information systems specified by the Government, an institution authorised by it, or the director of a municipal administration in accordance with the procedure laid down by the Government, an institution authorised by it, or the director of the municipal administration.
Note from the Register of Legal Acts. The provisions of Article 15(2) shall apply from the date of introduction of the general performance management information system in a public sector entity.
Article 16. Requirements for centralised organisation of accounting and keeping the accounts of public sector entities
1. Decisions on the public sector entities whose accounts are kept in a centralised manner and on the budgetary institution(s) that manage(s) the accounts of public sector entities in a centralised manner shall be taken by the following entities:
1) the Government shall take decisions regarding the Office of the Government, ministries, Government agencies, the agency of government representatives, agencies under the ministries within the remit of the ministers, other budgetary institutions whose owner’s rights and obligations are exercised by the Government or an institution authorised by it, and public sector entities controlled by the aforementioned entities;
2) municipal councils shall take decisions regarding the public sector entities controlled by municipalities;
Article 17. Recording of economic transactions and linking them with the data of the state information systems in the accounting of public sector entities
1. The data of the accounting registers of state and municipal assets the spatial data whereof is located in the Information System of Topography and Engineering Infrastructure must, in accordance with the procedure laid down by the Government or an institution authorised by it, be linked with the spatial data of this information system.
Note from the Register of Legal Acts. Article 17(1) of this Law shall enter into force as of 1 January 2025.
2. Where, in line with the procedures laid down in legal acts regulating the organisation of accounting, an accounting document cannot be submitted to the person responsible for keeping accounts, an economic transaction shall be recorded in accordance with the procedure for recording and evaluating economic transactions of the entity established by the head of the entity.
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
PRESIDENT OF THE REPUBLIC VALDAS ADAMKUS