The Luxembourg Accounting Standards Board (CNC) recently published a general notice (CNC 01/2014) in which it stated its opinion regarding the possibility for a Luxembourg company which prepares its accounts under Lux GAAP to adopt a floating financial year(1) (such a practice is already explicitly authorized for IFRS).
The CNC affirmed the use of this practice in stating that a Luxembourg company may adopt a floating financial year, as long as the following conditions are met:
the financial year's length must be near to a civil year;
the length of the successive financial years must be similar;
the dates of the opening and the closing of the financial year must be predictable and determinable.
The CNC considers that, in practice, a floating financial year should have a duration period consisting of between 52 and 53 weeks.
Furthermore, the Luxembourg trade and companies registry (RCS) currently requires that the calendar dates of the beginning and end of each financial year be filed with it, consequently, a modification filing will have to be made with the RCS each year, with specific mention of the calendar date upon which the company's financial year will end.
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(1) For example by stipulating that the financial year will end on the last Friday of the month of June, rather than on a fixed date such as 30 June.
