Consolidated financial statements

The law of 17 July 1975, art. 11, §1 (NL / FR), the Companies Code and the Royal Decree of 30 January 2001 (NL / FR) are the base legislation for the consolidation requirements in Belgium.

A Royal Decree of 18 January 2005 (NL / FR) allows companies to publish their consolidated financial statements in accordance with IFRS. For all quoted companies and non-quoted credit institutions and investment firms, the consolidation in IFRS is an obligation.

The obligation to prepare and file consolidated financial statements and consolidated annual reports is further governed by legal rules laid down in Articles 108 to 121 of the Companies Code (NL / FR), Articles 106 to 183 of the Royal Decree of 30 January 2001 (NL / FR) implementing the above Code and Article 11, §1 of the Law of 17 July 1975 (NL / FR) on company accounts.

Belgian companies are required to follow the Belgian accounting law (Belgian GAAP) in their annual statutory accounts and a priori in their consolidated accounts. However, for the preparation of the consolidated accounts, a Belgian quoted company must apply IFRS as adopted by the European Union. Other entities may also elect to use IFRS for their consolidated accounts, knowing that this choice is irreversible.

Every company

  • that needs to prepare consolidated accounts by virtue of the Companies Code ( see exceptions below)
  • and that
    • is either a company that exercises sole or joint control over one or more subsidiaries
    • or forms a consortium together with other entities

is required to prepare consolidated financial statements.

In Belgium, the two exceptions to the consolidation obligation are:

  • Small groups: based on the Companies Code, if a group does not exceed more than one of the following criteria, it does not need to prepare consolidated financial statements
    • annual average of workforce: 250
    • total assets: 14,600,000 EUR
    • annual turnover (excluding VAT): 29,200,000 EUR
  • Sub-consolidation exemption: a group does not need to publish consolidated financial statements, when its financial statements and those of all its subsidiaries are included in the consolidated financial statements of its parent or ultimate parent company, provided that
    • the parent's, or ultimate parent's, consolidated financial statements are prepared in accordance with the seventh EC-Directive guidelines or equivalent.
    • the general meeting of shareholders approves the exemption (valid for two accounting periods) with a qualified majority (90% for NV/SA and Comm. VA / SCA legal forms, 80% for all other companies).
    • the consolidated financial statements of the parent or ultimate parent are published at the National Bank of Belgium in one of the three national languages.

This exemption, in itself, does not impact the legal requirements to present consolidated financial statements (with a restricted number of notes) with the annual information to the works council.

The absence of consolidated financial statements based on the non-obligation (small group) or based on the sub-consolidation exemption should be mentioned in the statutory annual accounts of the company for the sub-consolidation exemption, together with:

  • information about the consolidating parent company
  • a special motivation about the compliance with the conditions for the exemption.

Quoted companies, non-quoted credit institutions and invest firms must publish consolidated financial statements under IFRS as adopted by The European Union. Consolidation exemptions are governed by IAS 27.